ASICMiner moves at the speed of light compared to other equities. I have been left a bit wanting for more though, with the weekly announcements. I appreciate the hard work that Friedcat and his team have performed, but I do think we deserve more information than the updates give us. We get three lines of thought per week lately. I certainly hope that board members are getting more information than us mere shareholders are getting, and that intelligent planning is taking place based upon those discussions.
dude, chill... Who cares about long lines of information, when the important thing is that ASICMINER delivers. What friedcat says, he does. Who cares about how many words he uses in an update?
No, this is not the important thing.
Right now, at current trading levels, investors get 0.5% dividends per week and we're ecstatic about that. However, we have no idea whether that is sustainable next week, much less three weeks from now, and not to mention five months from now.
A 0.5% dividend is easy for a few weeks or even a couple of months, but that's pointless if it turns out all the funds earned have been spent or paid out and we're now living hand-to-mouth, week-by-week.
Any unexpected event (a bad delivery, datacenter burns down, factory goes bankrupt, anything) can be a complete disaster, and having historically paid dividends is about as useful as grafiti on a duck. If investors are left paying for that with future dividends then we're basically screwed, regardless of friedcat's honesty and intentions.
Because we have no financial data, we do not know what maintains the profitability. For all we know, the rise in BTC value is the only thing keeping the ship afloat. With today's crash in BTC/USD (or RMB) price, that may mean that earnings drop considerably; we just don't know because we don't know what the financials look like.
Allow me to speculate a bit, though, and feel free to point out errors when you find them.
At these levels, 0.5% per week means 100% ROI (ie get back what you put in) is longer than the time to block reward halving. At that point, we can expect a huge drop in profitability and thus a gradual drop in share price.
As an example, let's assume that in late 2016, the share price drops 50% due to a 50% drop in block reward. From this level, that means the share price will be ฿0.65. In other words, for you to not lose money, the dividends by that time must be at least ฿0.65.
There are 191 weeks until January 1, 2017. Divide the expected price loss by 191, and every week on average, ฿0.003 per share 'dies' due to the block reward halving.
This, of course, does not take into account that you may want to actually earn something from your investment. These figures solely assume you don't want to lose money. There's no profit for investors, no risk premium for essentially lending that money to AM, no accounting for competition increasing, etc.
Right now, the dividends have been more than ฿0.003 and have, in fact, been almost twice that. If that is maintainable, that means by the end of 2016, a share will have paid ฿0.65 in dividend _more_ than the block halving will cause. Over 191 weeks, that comes down to roughly 14% per year in return on investment, in other words what we as investors get from risking our money.
This is still assuming that a ฿0.006 per share per week is maintainable, but if we need to fund AM with ฿2K every couple of weeks or even once per month from this point, the equivalent of 0.005 per share, then we're screwed, to put it mildly. ฿2K less per month means 25% reduction in total dividend earnings, dropping the ROI from 14% to around 10%, and now we're suddenly talking NASDAQ index levels.
If, on the other hand, AM does not have funds on hand, like their recent withholding of short-term earnings may indicate, then any event such as those mentioned above can be a complete disaster. Even if they have the best insurance in the world, a fire in the data center will be a complete disaster because you can't just take your insurance money and stop my Radioshack on the way home to pick up new ASICs. If friedcat has a heart attack tomorrow, it will take weeks, maybe months for someone else to step in and get everything back in order.
Suddenly, 10% yield per year is not looking so swell. Why would any investor with serious money back a massive risk startup in a completely unproven field then they can buy index funds that yield almost the same return? What we're left with is people that won't or don't know how to do the math, even at these basic levels, and those are essentially just suckers looking at historical performance as an indication of future profit, which is madness.
Note that nowhere do I even guess at what happens when competition enters the scene, or speculate in difficulty changes, or anything like that. I simply say that if the current levels of dividends are maintained, any investor worth their salt would be much better off buying NASDAQ Composite.
Important information is that:
- we have hashrate of 12 Thashs/s and rising
We've been expecting 50 with no words or plans on how that's going.
- very successful sales of blades and development of USB miners
Will that need to be done every week to maintain dividend levels?
what more do you want? Other companies (BFL) keep on babbling and they can't deliver. ASICMINER doesnt care about product names, websites, logos and all this useless crap. This company is efficient and delivers what it promises. That's what's important.
No, not really. Not unless the value of AM is hype, in which case, we're selling to suckers and hoping nobody notices before the air goes out of the balloon.
.b
EDIT: Just to be clear, I'm still optimistic and a strong believer. I have no issues with huge risk, and there may be huge rewards. I would like more transparency, though, and I'm hopeful that friedcat can make that happen like he seems to want.
