A quick back-of-the-envelope valuation: imagine they reach the goal of 10% of the network hashing power, meaning 360 BTC/day, then annualise it and apply a P/E ratio of, say, 10, and you should end up at 3.285 BTC/share.
So it appears slightly undervalued in the market today... (or people in general don't believe ASICMINER can keep 10% of total hashing power)
Possible, but also possible that people just can't/haven't done the math. Also P/E ratios in the bitcoin world tend to be much higher because there is no SEC regulation, so there is always a higher risk someone could just take the money and run. Still, assuming asicminer doesn't get killed by BFL/Avalon shipping, a 0.7 valuation is pretty cheap IMO.
The cost of maintaining 10% network power will increase as new players enter the market. Once (if ever) BFL enter the network, more avalons and new players with newer technology will place negative pressure on margins that AM shareholders currently enjoy.
IMHO it may be naive to expect AM to scale with the network in an open competitive environemnt without a significant hit to the marginal earnings capacity, and possibly also naive to talk of PE ratios needing years of earnings to break even when, tbh we have only seen earnings over a matter of weeks (with a significant, but eroding first-to-market advantage)
Try to consider how long it will take to make a significant impact in the margins...
Consider... what percentage of their income from the current 10% of the network they hold do you think go to overhead? I suspect it's a very small percentage...
Consider how long it's taking the competition to ramp up and distribute hashing power. And how long it will take once the network is stable at say 650THash/s... (that's a BIG jump from where it is today). That would allow ASICMINER to mine at 10% capacity with the 12THash they have (not all deployed) now, and the 50THash they have bought and paid for at the foundry being ramped up through April...
So beyond that, how long until say that hashrate doubles? requiring them to double their capacity, and how long/hard will it be for them to double the capacity? How much will it cost considering they pay under a dollar a chip I believe I remember friedcat saying (now that they have done the initial R&D and proven the chips).
Lets say operating costs are 10% of the current income (I think it's much lower). In that case how much would the global hashrate have to increase before the net income is halved? To drop the 90% rate to 45% rate, would require an additional 45% overhead. Meaning the overhead must be 5.5x the base rate of 10% (again I know I'm guessing at the 10% but I think it's a conservative guess). So that means the hashrate would need to get up to 5.5x 650THash/s... Which would mean a global hashrate of 3.5PetaHash/s... That's a LOT of hashpower... And how long do you think that will take to achieve? I suspect AT LEAST another year (likely longer)
And if ASICMINER is smart, they will begin transitioning before that to mining gear sales. Using their market lead to sustain development of next-gen hardware to compete and keep competitive in that market. Bolstering their bottom line.
Will the mining game eventuall approach zero sum? Yup, that's how it was designed. It naturally gravitates towards razor thin margins. But in the event of a major tech shift, the leader can likely ride the wave for quite some time in this case. And if done right, they can adjust their business model to compensate for any changes as they happen.
I Highly suspect ASICMINER will be able to sustain more than 10% of the network if done right. But the above only really requires them to maintain their 10% estimated... And that allows lots of breathing room...
So... 0.75 sounds like a fantastic deal now doesn't it
