Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It - page 1104. (Read 3917058 times)

I guess you are...

Let's say, one day in early 1964, you had a hefty $11 and wanted to go bananas buying a share in, I don't know, a textile mill. That company decides to never pay a dime in dividend. Well, maybe once.

You know what happened 50 years later to that $11? Try this: https://www.google.com/search?q=BRK.A

A share is ownership of a company. When the company has piles of cash, you own a part of that pile of cash. If they pay out that pile of cash, your share is valued less, but you have that cash in hand, which is fine if you know better than the company what to do with that cash.

.b

that goes right to the core of the stock market in general. i mean, apple, google, etc... do they pay dividends? i don't believe so. so yea, it IS pure speculation.

Dividends are paid high and often because this is a mining company, which for many people is basically a substitute of buying themselves mining equipment.
I.e. see it less like a company, and more like a consortium: people who want to be mining but instead of doing it directly they delegate it somewhere else.

That said, I'm also skeptic to the whole "non-dividend company" idea: what would be the point of owing any share, then? What would give the shares their value? Why should I buy those shares, other than for speculation? (but why would I speculate on something which has no inherent value?)
I guess I miss something here.

In a growing market, dividend payments are rarely a long-term strategy, and by gosh this is a growing market. Opportunities arise at a moment's notice. Having cash on hand is never a bad idea, and it wouldn't be worse for investors as long as they are confident in friedcat and his abilities to run the shop.

Let's imagine, hypothetically of course, that one mining company ACME Mining had a huge order for next-gen chips in production, paid for, but not delivered, and then went belly-up for whatever reason. With a few piles of cash, ASICMiner would snap up the order and possibly make a killing.

Let's further imagine that the server center housing a chunk of AM miners burned down and that due to a clerical error, the insurance for whatever reason covered only 75% of the losses. Now friedcat could say "Fine, we'll cover the remaining 25% from our holdings while we fight this in court" instead of "sorry guys, we won't get a dime from the insurance until we've fought this in court".

Let's imagine that a perfect data center went up for sale that would reduce AM costs by 5% due to, I don't know, better ventilation, shorter travel time, free cocaine for the staff... Now friedcat could say "great, I've always wanted a dedicated data center" and swipe his cell phone, saving 5% cost in a few minutes before the competition could arive.

There are plenty of scenarios where AM having a chunk of cash would benefit the solidity of the company.

Be aware, though, that the current policy of paying 90% of profits looks fine on paper, but could ultimately doom AM. If prices of electricity rose and prices of BTC dove, the profit would shrink drastically because, I suspect, most costs for AM is denominated in RMB.

We're basking in comfort right now because we own 30% of all generated coin, but companies are drooling over their chip designs to get at that money, and if AM isn't staying ahead, having no cash at hand could easily lead to a situation where they can't afford to pay for the next generation of chips required to leap ahead again.

Finally, if you go to bed now and wake up in early December 2016, you'll find out that dividends have at least halved simply from the drop in block reward. This will also affect share prices, at least when the herd realizes that the eventual halving needs to be pro-rated from today's price.

Because there is roughly 40ish months left until the halving, the share value will be, in a perfect equation, reduced by 1/80 every month. At the current price of ~฿1.7, that means 0.0215 per month of 0.0053 per week, but note that this is share price, not value.  

Start deducting 0.005 from your dividends each week and see how much is left, if AM gets its expected 10% of the network hash rate on average throughout 2013. I guess the ROI looks somewhat different then.

Despite this, I am still bullish about AM. I'm just not as certain at these prices if the extreme dividends people expect are paid out.

So, a high dividend in a growing market is not a long-term strategy. Having cash at hand allows AM to seize oportunities that we as individuals wouldn't get and will give them better options for maintaining profitability also beyond 2016.

.b

That website isn't mine, the owner just asked me if he could use my charts to put on his website
I already sent him a message yesterday to update it for the new charts.

O_O color me impressed nice doc
Also on a sidenote siteadvisor was being weird on deepfriedcat site so even though I know there was no issues at least it won't pester me about google docs

My newest version also include the paid dividends (the red dots )
The site will probably be updated soon

_{Or click here}

Im not better for sure... but why do you think there are investments gone lost that could have lead to even higher return? I mean AM paid already for everything possible to invest. Of course a financial cussion would be good for bad times... but only piling up bitcoins for no reason doesnt make much sense. Then i would be better in optimizing these bitcoins myself.
It looks a bit like you think friedcat cashes out divs while in fact he knows that there are better things to invest for even brighter dividends future? Im not sure where you got this impression. I think there is nothing worth to invest, otherwise friedcat would do it.
But i think this discussion we had already...

You are right, I bought 100 shares at IPO with the first 10btc I bought a year ago, and now look at the shares prices and dividends.. And immagine those who bought many more shares!
So yes, I would invest on anything of friedcat

Person with success would throw some at him too
hmm from a few links back
http://deepfriedcat.com/
Who wanted to make him edible Xd
Guess we'll see

Yes, you're probably right. There'd be a few ASICminer success story early investors that will throw BTC at him whatever he turns his hand to next, if he offers part of it.

Probably worth wishing for something with a higher chance of occurring. 

Sour grapes much?

i know that feel. bought 5 at ipo, some when they doubled about a month prior to the glbse collapse, then recently bought 1 at .9... really wish i had the lot still.

I hope ASICMINER prospers but honestly I hope the share price dwindles when BFL ships to balance the difficulty lol, I wish i didn't sell my shares 

I think that's what the point of Bitfountain is.  I think he will use that as a mechanism to provide some capital to new ventures for a controlling interest in a venture.  He may publically offer the other part (a la ASICMINER) or not.  Either way, I think Bitfountain will be one of the big players in Bitcoin down the road, probably moreso than ASICMINER will be.

Yep. If most of the equipment sales are passed on as high dividends, more interest and speculation will see some higher prices. Those speculators will turn tail and flee though if a high dividend is not maintained indefinitely, which I don't think can be (nor does it need to be).

Still a pretty good price in my humble opinion for a long run short run speculator 1.5
But I see 2 sometime in the next little while A month or two maybe less

lol wow 1.6 share value. I think i might buy a gun and shoot myself in the foot with the shares i sold at 1.3.

This is true, but as we saw a while back the company does not have cash-at-hand to cover investments and thus had to 'hold back' ฿2000 from dividend payouts. Further, until we know how the capital management is, we don't know what effect a crash in BTC prices will do to cost levels. 90% dividend payout sounds nice, but are those remaining 10% set aside enough to cover the costs if the DHS stuff causes BTC to crash to $1?

It's not bad for a share's price to withold dividends. Just ask Berkshire Hathaway or Apple.

.b