Topic: ASICMINER Speculation Thread - page 204. (Read 808847 times)

I agree I hold the more risky position indeed. That is why I pay about 10% of the strike for my options. I do not think my position is THAT much riskier.

Long-term I have little doubt things will play out as I describe... I am in fact an engineer in the semiconductor industry, and it is my strong opinion the performance increase from ASIC gen 2 will pale in comparison to the performance increase coming off GPUs.


Disclaimer: I'm wrong lots.

You seem to be ignoring the biggest factor: AM also develops their own mining equipment. Your argument works for regular mining bonds but for companies with engineers and R&D teams the whole paradigm shifts. Yes, cost per TH decreases but they release a device that can hash a higher volume of TH. on top of this the whole market knows that AM can deliver! The logistical side of orders, shipping and receiving is already operational.

The only question is will AM continue to outpace the competition in the hardware war and what many of us are thinking is, "Yes." Mainly due to not seeing any formidable competition at the moment, ( though there are some forming on the horizon). The smart bet in regards to mining companies is with AM, I see not compelling evidence otherwise.

In light of this, your position is actually the more risky bet. You are betting that a company will appear that has the hardware, personnel, and infrastructure to do in three months what AM has already been doing and doing well.

I think you are doing well to inject a little pessimism into the thread.  But I don't think those that are disagreeing with you seem a little "groupthink-y".  Seems to me you are getting just as well-reasoned responses as you are providing.

But yeah...  you can't deny it.  You are spreading FUD.  You have admitted to a vested interest in the price going down.  The real giveaway was that you say that AM is traded on unreliable exchanges.  Yet you bought puts on the same "unreliable" exchange.

My point is that it doesn't. A month or two ago, a couple of AM blades might have been 1% of the network, yeah? Now you'd need many, many blades to get 1% of the network.

Do you think that the manufacturing cost is the same? (It isn't). Do you think that the electricity cost is the same? (It isn't.)

As competition ramps up - i.e., the hashrate - the marginal profit per % hashrate will drop precipitously. AM will feel that, both in terms of mining profit and hardware profit (people will simply pay less per TH, which is how manufacturing cost is determined).

But I'm not basing my evaluation on AM financial structure. I'm basing my analysis on what must happen to the AM dividend (which seems to be the justification for the current valuation) as a result of

- increased hardware competition
- shrinking marginal profit due to higher hardware cost and higher electricity cost per % network hashrate
- decreased hardware sales prices reflecting lower % network hashrate per unit

"This is a bubble.

Anyone saying otherwise has ulterior motives (they probably still own a lot of stock).

It's clear as day. Look at the parabolic trajectory. Consider the lack of short selling. Have you guys already forgotten Bitcoin in March?"

Thanks... honestly and truly, I am not trying to FUD people into selling. These are my real opinions at this price level; I hope it's clear there's actual logic behind them. If you disagree, that's fine, but the response has seemed a little groupthink-y to me.

Eh, I don't mind contrary opinions. At least Vycid's arguments are rational.

But you're failing to factor in the comparison of ASICMINER versus what is on the market, available for purchase, *today*.

I think my argument holds up quite well when you factor that in.

My point is that it doesn't. A month or two ago, a couple of AM blades might have been 1% of the network, yeah? Now you'd need many, many blades to get 1% of the network.

Do you think that the manufacturing cost is the same? (It isn't). Do you think that the electricity cost is the same? (It isn't.)

As competition ramps up - i.e., the hashrate - the marginal profit per % hashrate will drop precipitously. AM will feel that, both in terms of mining profit and hardware profit (people will simply pay less per TH, which is how manufacturing cost is determined).

So what?  This didn't stop you from buying puts on one of these "unreliable" exchanges.

Are you kidding? Neither Bitfunder nor BTCT is a reliable exchange.

You guys are aware that AM used to trade on GLBSE...?

There is currently no such thing as a reliable Bitcoin exchange, and there won't be until some serious money comes in to do underwriting.

We already have seen how right your technical indicators and fundamental valuation are.

The suggestion that AM is in a bubble begs us to define exactly what a bubble actually is. I prefer this definition:

"A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs."

We know there was (and still is) a surge in prices. This is a matter of record and irrefutable. But this alone does not make a bubble.

The first question an investor must ask is whether or not the surge is warranted by fundamentals. This aspect has been hotly debated since before we at 2.0, and I expect can only be answered for any given timeframe or value in retrospect. Some people believe 5.0 is not warranted. Heck, if you scratch around enough you can still find people who think 2.0 is unwarranted. One thing is certain: there is nowhere near enough information about AM financial structure to even begin to do a proper analysis. The truth is that we really don't know the fundamentals, so we do not know if it warranted... period.

There has not been a drastic drop in prices. This is also a matter of record.

I would suggest that the recent volume of sales could well be considered massive. The volume of shares at auctions for direct shares has increased substantially recently, however, they did nothing but temporarily stabilize the prices. Likewise, volumes on the exchanges have accelerated as well, but once again, there are still plenty of buyers driving the prices even higher.

If we did not see the increased volumes of sales I might suspect a bubble forming as the trade was being pushed up because of a thinning of the market. But the number of liquid shares appears to be increasing without driving the price down. This is not a sign of a bubble, but rather, of an undervalued asset.

The suggestion that AM is in a bubble begs us to define exactly what a bubble actually is. I prefer this definition:

"A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs."

We know there was (and still is) a surge in prices. This is a matter of record and irrefutable. But this alone does not make a bubble.

The first question an investor must ask is whether or not the surge is warranted by fundamentals. This aspect has been hotly debated since before we at 2.0, and I expect can only be answered for any given timeframe or value in retrospect. Some people believe 5.0 is not warranted. Heck, if you scratch around enough you can still find people who think 2.0 is unwarranted. One thing is certain: there is nowhere near enough information about AM financial structure to even begin to do a proper analysis. The truth is that we really don't know the fundamentals, so we do not know if it warranted... period.

There has not been a drastic drop in prices. This is also a matter of record.

I would suggest that the recent volume of sales could well be considered massive. The volume of shares at auctions for direct shares has increased substantially recently, however, they did nothing but temporarily stabilize the prices. Likewise, volumes on the exchanges have accelerated as well, but once again, there are still plenty of buyers driving the prices even higher.

If we did not see the increased volumes of sales I might suspect a bubble forming as the trade was being pushed up because of a thinning of the market. But the number of liquid shares appears to be increasing without driving the price down. This is not a sign of a bubble, but rather, of an undervalued asset.