Topic: [BitFunder] TU.SILVER -- News & Reports - page 3. (Read 6155 times)

Just remove the references; see post #2 (FAQ) for an explanation of our self-moderation policy.

I've informed him of the take over twice, and asked his opinion, but I did not yet receive a response. As far as I know it won't be an issue anyways since nothing is planned until after the exclusivity clause expires in August.

Self-moderation edit: We had an amicable discussion over this in the thread, and even Deprived had a few salient points to make. The net result is that we will not be taking over LTC-SILVER. I don't feel the discussion is 100% on topic for a news and updates thread so I will be deleting it. I'm not really interested in rewriting or moving the thread, but I'd comment on it briefly if in the future the issue rises again (if someone else is taking over an asset on LTC-GLOBAL) if it seems my experience here would be of any use. A big thanks to burnside and deprived for discussing it.

From the contract currently posted on SILVER on btct.co:


Is Ukyo aware that you are taking over LTC-SILVER on litecoinglobal.com?  What are the consequences if you break your contract?  Is it prudent to be pursuing SILVER's approval on BTC-TC?

An interesting arrangement none-the-less.  Glad we didn't try that with BAKEWELL.     (BTC-TC does not force issuers to stay with us, quite the opposite, if they're unhappy, we make it easy to leave.)


Regarding the rest of the votes/mods, I said it before and will say it again, it is my opinion that you aren't going to shake the stigma until you've closed everything out on your ex-GLBSE assets in a way that doesn't leave people feeling like you've burned them.  Have all of the guarantees that you made on them been fulfilled?  (Sorry, haven't been tracking that closely, but I did try to help with the BITVPS stuff.)

Cheers.

Well, we already have DeaDTerra watching over the books and vetting most major decisions. But the current plan is to give CSDOG access to our books and see what he thinks and what he can come up with. This is all part of listening to shareholders and making TU.SILVER the best it can be. I take the (constructive) criticism of people here very seriously. On that note,


I'll take the LTC-GLOBAL moderators up on this and post responses here in the hopes that the moderators can either come up with some constructive criticism or vote YES on the assets

The following is an address to the LTC-GLOBAL moderators stating how I have addressed your issues with SILVER (posted April 12th, 2013):

1. Anonymous voted NO with comment: Contract is misleading. It repeatedly claims this is a coin shop - yet if you look at Bitfunder prices and accounts it's obvious that the price charged is massively over the price of silver. Huge additions are made to the price for various cash positions/investments - which is totally lost if you actually redeem shares for Silver. Contract needs to be re-written honestly to reflect that shares represent mainly non-silver investment - with exchange for physical silver requiring you to sacrifice the overwhelming majority of any investment you made, making it about the most expensive way to buy silver that exists.

Response: Fixed. Please see https://bitcointalksearch.org/topic/m.1806063 and https://bitcointalksearch.org/topic/m.1876258 for more information on how we've increased our value as a vehicle for owning silver without losing value for our customers.


2. Anonymous voted NO with comment: untrustworthy manager

Response: SILVER hired DeaDTerra to do the books and advise the fund. So you don't need to worry about trusting me, one of the most trustworthy people on BTC-TC is now watching over our books and vetting any major decisions we make. Additionally, we have put out an audited financial report. There is no longer any reason to think I will be an untrustworthy manager. Thank you for helping me make SILVER a better issue!


3. Anonymous voted NO with comment: Want identity escrow.

Response: Good idea. I am now the first asset issuer to do this. I have registered a BTC-TC account with BTCJam and I have linked my forum account, e-mail, paypal and e-bay to that account. Additionally, DeaDTerra knows my identity and I will instruct him to reveal it should it be required. Your request has been satisfied. Please change your vote to YES.


4. Anonymous voted NO with comment: Issuer has a poor track record.

Response: So did all mining bonds, such as YABMC, BTC-MINING, RSM, COGNITIVE, and so forth. I ran a mining fund which invested in the aforementioned securities. It's not really fair for you to vote NO with this comment, but I won't ask you to vote YES if you feel it's an issue -- I'd just ask you to be consistent and vote the same way you voted for YABMC, BTC-MINING, RSM... etc. However, talking about right now, if you look at how I am running TU.SILVER on BitFunder, you will see that I have a very good track record. Take your time on this one -- maybe check back in a month or so and I trust you will see that my track record is actually far better than those who disparage me. BAKEWELL and BITCOINRS anyone?


5. Anonymous voted NO with comment: Issuer has proven to be unreliable and untrustworthy in the past.

Response: This was one of the first NO votes. It was a bit harsh when it was made considering I was in the same boat as all other GLBSE refugees, but now that BMF and NYAN have liquidated almost all their assets and made payments to shareholders, it is simply no longer true. You can see that I am willing to step up to the plate with how I run SILVER. We are doing an excellent job and are receiving lots of positive feedback from our customers (check out post #2 in our News and Updates thread!) Everything I have done so far shows I am reliable and trustworthy (also see #1 above). Being honest, please come up with some constructive criticism or at least change your vote to ABSTAIN if you really don't want to vote YES!


6. Anonymous voted NO with comment: Don't give usagi any of your money or time

There's no reason to be nasty. It's not okay to vote NO if you don't like me on a personal level. Try to come up with some constructive criticism and let's make LTC-GLOBAL a better place to be. Leaving rude comments undermines the moderation process and makes it look amateurish. I strongly suspect that you wouldn't have written this if you were forced to reveal your identity as a moderator.

TU.SILVER stockholders: In the old thread I called Usagi to start publishing normal financial statements.  In another recent thread Usagi's reached out to try and bring an accountant on board to help with that process.  Good news for everyone involved and hopefully the endeavor works out.

Forum edition (for your convenience)

The TU.SILVER Report
Interim Report
April 19th, 2013

Dear Investor; welcome to our interim report.

At TU.SILVER, our goal is to keep the price of our units very close to the price of silver. Fortunately or unfortunately in March and April of 2013 our business became far more successful than we predicted, and we are now heavily overweight BTC.

To combat this, we have decided it is no longer necessary to maintain a kitty to cover the expenses of the fund. We have therefore closed the TU.SILVER kitty account (1Kitty8g4AMrU8QaLCntESmrvJNmz1QUGk) and made a special one-time distribution payment of 0.0071 per unit. The remaining amount will be recorded on our balance sheet and used to provide liquidity.

This action will lower our internal valuation by exactly 0.0071 BTC/unit and bring us much closer to parity with the spot price of silver (plus a fair and reasonable premium for vault storage, etc.) This should make us much more attractive to silver investors while still retaining the ability to pay for secure storage and offer free shipping worldwide to all of our customers.


For more information on TU.SILVER and how to protect your money in today’s crazy BTC market, please visit the TU.SILVER page on BitFunder:
https://bitfunder.com/asset/TU.SILVER

Wrap Up for Monday, April 15th, 2013:

Silver $22.85
MtGox $65.000
TU.SILVER internal valuation: 0.0884

Articles of interest (4/15):
"Gold Crush Started With 400 Ton Friday Forced Sale On COMEX" (ZeroHedge)
http://www.zerohedge.com/news/2013-04-15/gold-crush-started-400-ton-friday-forced-sale-comex

"Massive $20 Billion Paper Gold Sell Orders Trigger Stop Loss Selling And Unfounded Panic" (GoldCore)
http://www.goldcore.com/goldcore_blog/massive-20-billion-paper-gold-sell-orders-trigger-stop-loss-selling-and-unfounded-pani

"Gold suffers biggest one-day drop since 1980s" (MarketWatch)
http://www.marketwatch.com/story/gold-falls-sharply-copper-hit-after-china-data-2013-04-15?siteid=YAHOOB

"Extreme Nervousness in Regards to Collapse-Gold Silver a Must-Rick Rule" (USAWatchDog)
http://usawatchdog.com/extreme-nervousness-in-regards-to-collapse-gold-silver-a-must-rick-rule/

Update:

I'm pleased to provide the latest TU.SILVER weekly report. You can read it online here:

TU.SILVER Report -- April 14th, 2013

Forum version (for your convenience. For charts, please see the link above):

EDIT: The price of bitcoins has fallen to $60 during the creation of this report and is still extremely unstable.

The TU.SILVER Report
Special Report: Cypress Watch
April 14th, 2013

Dear Investor; it is our pleasure to present this week’s report. Let’s step right into the action by looking at the price which – at least for now – appears to have stabilized.

kitco.com   $1477.00 (23.44 BTC/oz.)
kitcosilver.com   $25.85 (0.2446 BTC/oz.)
Mt. Gox Weighted Average   $105.68

Local tops and bottoms are in, metals are down on Cypress news. To understand the future, look to the past.

THE CRASH IS OVER?
The major story is once again mtgoxUSD, which hit a new all-time high last week at over $250 USD before collapsing to $65 and (apparently) stabilizing just north of $100, all within a few days. Here’s the data from bitcoincharts.com:

[for charts please see PDF]
 
CHART DISCUSSION
We hypothesize whoever had been buying up until that point has now sold out, and that the price stability coupled with a net buying tailwind in the $90 to $110 range is a positive sign going forward. For us, seeing the MI dip down and the MFI go into danger mode seemed to confirm a reversal, so we bought 43.2oz. of silver mtgoxUSD $200. We now look towards price stability until the MI can cool off a bit and the price can work itself into the public consciousness. It is after all still around double what it was before all this started.

CYPRESS WATCH, SWISS WATCH
Mario Draghi is the most influential man in Europe now. “He undermined Cypres’ ability to sell gold at a higher level.” I liken this to a creditor seizing property and selling it at whatever price he can to get his money back. Peter Schiff writes,

In the eye of history this article showcasing Mario “Do whatever it takes” Draghi will be seen as proof that Mario Draghi is a stalwart and steadfast Euro-man who does what he says he is going to do. Overall it is very interesting to see the Euro finally take center stage in Europe and to see what a centralized currency really implies in terms of nationalist politics.

After all, what is going on now amounts to a confiscation of national gold reserves. Details are sketchy but it appears as if the gold reserves of Cypress are going to be confiscated and sold into the market to help pay off the debt of Cypress. This is somewhat humorous because on one hand we are bred to feel this sort of thing is somewhat evil, but on the other hand no nation can use sovereignty to avoid paying its debts. In this way the EU has avoided a war and they have become the heroes of the hour.

Getting back down to earth, this news has acted to depress the price of metals. Investors have sold because they’re trying to get out before the fix is in. They hope to buy back later. This makes it a huge buying opportunity. Buying may be very wise indeed given the news of what’s coming. A joint paper by the US FDIC and the Bank of England for the G20 summit in Switzerland says similar plans have been made for US and UK depositors since prior to 2012, implying Cypress was just a test tube. So we think Peter Schiff is right. After all, what’s the latest news? Now that Cypress is over? We start to hear about Portugal.

Got silver?

For more information on TU.SILVER and how to protect your money in today’s crazy BTC market, please visit the TU.SILVER page on BitFunder:
https://bitfunder.com/asset/TU.SILVER

FAQ (Frequently Asked Questions):
1. (from Deprived, paraphrase) "This thread is self-moderated. What does that mean?"
A: It means I can delete your posts but I cannot edit them. For clarification here's the entire moderation policy:

• No swearing.
• No excessively off-topic comments (no rambling).
• No scam accusations.

If you break these rules is I'll send you a PM requesting you make an edit. If you break them repeatedly I will simply delete your post. Regarding swearing, blotting out words is not an acceptable compromise. Just don't swear. Regarding scam accusations, if you have solid information that I or anyone is scamming, go post it on the scam accusations forum where it belongs. If you do not have solid information but are merely suspicious, please feel free to post a logical, well-thought out question. I'll be pleased to answer it and credit you in the FAQ. Note I am not a moderator or anything -- If you can't abide my local policies you're free to post whatever you want -- in your own threads.


2. (from burnside) Seems like investors would be best served with two assets so that they can mix and match whatever exposure they want. For example TU.SILVER (100% silver backed asset, nothing but a silver backstop.) and NYAN.2013 (The Usagi 2013 Fund). It would definitely simplify things a bit, maybe eliminate some confusion?
The reason we keep an investment position is to pay for expenses like shipping and secure storage. In other such funds, fees are taken out of the core position or applied on top of the price you pay for units. This guarantees that your investment will go to zero if you hold for the long term. This is what makes TU.SILVER unique, we preserve the long term value of your investment.

Our strategy is to keep the investment value of our units as unobtrusive as possible. This way, the added value from our services (like secure storage and free shipping) can be priced by market demand, and we can make money by selling new units of silver into the market. If we try to sell shares for more than they're worth, the market will trade under us and we won't be able to grow our business or make money selling silver. So we have a strong financial incentive to keep prices tied to silver.

Looking at how this has worked out so far, early investors paid about .21/unit representing almost 100% into silver. But now that the price of silver in BTC has fallen 90%, our investors have not lost 90% of their money. Our investors still have the same amount of silver they always had, but they have added value from our investment position and from 0.039337 BTC in distribution payments. The distribution payments alone represent more than 200% of the current value of silver backing each unit. So versus someone who just bought silver and held, our investors have done very well. That being said, we recognize the fund feels overpriced and unattractive to new investment. Going forward we will continue to return value to investors via weekly distributions. This should lower the price and increase demand without lowering the value of our units for long-term investors. We hope that as we get closer to the spot price of silver this issue will not be as important as it seems right now.


3. (from Deprived, paraphrase) Can you (usagi) please give me a valuation of your company or provide access to the internal value calculator that you use?
I can't. The way TU.SILVER works is that I (usagi) fill the role of "general contractor" for TU.SILVER. I simply can't afford the time to get tied up in going over the books every day, so I've hired someone else to do it. This way I can more effectively produce value for the company in other areas. If you need accurate information about our company, please see our audited reports which are published at least monthly. You are also welcome to contact our financial advisor directly with any questions about the finances of our company.

If you are looking for a more in-depth relationship with TU.SILVER, we allow unitholders access to our books on the condition they not be shared or published. The fee for this service is 1 share of TU.SILVER.


4. (from Deprived, paraphrase) On April 25th, 2013, you stated that as a result of an accounting error made by usagi, cusdog discovered 30 BTC which was not factoring into the balance sheet. How did this mistake pass your previous audit?
It didn't pass the previous audit. What happened is that I had recently been inserting and deleting rows on the spreadsheet (they are done by hand) and I had forgotten to update the balance column. The entire point here is not that it passed an audit, but that it was caught by an auditor.


5. (from Deprived, paraphrase) Regarding the 30 BTC accounting error, why didn't your share price increase? ("Much to my amazement...it appears that somehow doubling internal value of shares has a negligible impact on their price.  Maybe I somehow misunderstood things ...
Your misunderstanding stems from the fact that we don't set the market price of the units -- the market participants do that. What's more, we announced that we sold out all shares and had also published a full explanation of this to TradeFortress in the thread. In short it's not us setting the price. We can't -- we have no more shares for sale. And obviously we are not profiting from this either. We agree with you that it's surprising that the price went up as much as it did, but that's the market for you. Our holders are free to enter sale orders at whatever price they want. For what it's worth, I will discuss with our advisor what to do in the future to mitigate wild price swings to the upside, should they become a problem for our unitholders.


6. (from Deprived, paraphrase) Regarding the 30BTC accounting error, was the money yours (usagi's) or the company's?
You answered your own question. You already know that cusdog found the error on our balance sheet. So there you go. On a deeper level, you should probably be reminded that the internal value calculations we provide are not financial reports and are not intended to represent investment advice. This is why we ask that our internal company documents not be published. Please see FAQ question #2 for more information on why I can't answer this more in-depth for you.





Letters and Comments from our Shareholders:

Subject: TU shares
« Sent to: usagi on: April 19, 2013, 09:45:17 PM »
hey man, (relatively) new to bitfunder but experienced with trading assets.  just wanted to say i bought shares today and im impressed by what you've got going on.  seems like too many issuers are scammers..shit like bakewell and ziggap damages the shit out of the market, but you and a few other solid bros are holding it up.  btw, your P/E is kicking the shit out of ASICMINER's...overrated...no way im paying 1.25 for that.  glad youre giving us a solid alternative


#bitfunder April 12th, 2013
[01:41] <######> wow nice dividend. thanks very much usagi

Latest News: Bitcoin Crash Report! Sunday April 14th, 2013
-----
Following is the contract I am using for the issue of TU.SILVER on BitFunder.

=Issuer Detail======
usagi
[email protected]
Longtime forum member


=Contract======
SILVER is a company which operates a silver fund enabling investors to hold physical silver. We also sell covered call contracts to pay for secure storage, generate revenue for the company, and pay a modest dividend.

1. Each outstanding share in SILVER represents 1/10th (0.1oz) of 0.999 grade (or better) physical silver.

2. SILVER will allow shareholders to exchange shares for PHYSICAL silver bullion at any time:
2a. Shareholders must trade-in their shares in lots of 5, as the minimum denomination we can ship is a 1/2 oz. silver round.
2b. Shipping is 1 share per 10oz (i.e. 1%) airmailed anywhere in the world, with tracking number and insurance. Additional shipping options are available at the customer's expense. SILVER is not liable for customs, duties, taxes, VAT, etc.

3. SILVER will sell covered call options to generate revenue and pay for secure storage fees.
3a. SILVER will not sell covered call options if the call of the contract would reduce the backing of the fund below one tenth ounce of silver per share (unit).

4. SILVER will hire an advisor to prepare and publish acceptable financial reports twice per year.
4a. The current advisor is DeadTerra.

5. The issuer assumes personal liability for the silver and guarantees investors will retain the ability to claim their physical silver by trading in their shares as outlined in clause #2.

6. We have an exclusive arrangement with BitFunder to support BitFunder as a platform. We will not trade on any other exchange until August 2013.
6a. We can not honor the trade-in program for shares of an unlicensed passthrough operation.


=Executive Summary======
I know the silver market very well and I have an excellent OTC rating. I have sold gold and silver on bitcointalk and on ebay for many years and I only have positive feedback from my customers. I have been watching the silver market for about six years now and I have a great business idea which I believe will work: SILVER. I hope you agree that the contract I've come up with is a good deal.

The core business here is not just allowing investors to buy silver in bitcoins like any other fund -- it's to leverage that position to generate dividends. The SILVER advantage is that if we are stopped out on our cash position, our physical SILVER rises in value to cover the loss and provide reasonable returns, while still allowing us to honor the trade-in program. While if the price of silver declines or remains steady, we generate income from our trading strategy.

The ability to generate dividends along with the promise of backing and the ability to claim your physical silver at any time, makes SILVER a unique business model that I feel will work well. I'm very excited to be able to stand by this contract and you may feel free to contact me by telephone or by e-mail if you have any questions.


=Business Description======
Primary Business: Silver Storage
To start the company we will convert existing ounces of physical silver into units of the fund. We will then sell these units into the market at a premium to spot price, representing the existing premium* on 1/2 oz. coins and need to pay for secure storage. From that point physical silver will be bought and converted to shares of SILVER either out of the cash position of the company or immediate-term loan, then converted to units and sold on the market.

Secure storage costs 0.49% per year in Hong Kong (VIA MAT or G4S). Other vaults around the world have similar rates, although Switzerland is notably higher at 0.99% per year. I am planning to start with the vault in a local bank so that we may inspect the silver at our leisure.

Secondary Business: Selling Covered Calls
We will write covered call contracts against the silver position in order to pay for secure storage fees and generate revenue for shareholders. This will allow us to pay for secure storage fees on an ongoing, permanent basis, and to expand the fund.

Since storage fees are around 0.5% per year and we expect to make ~1% per month on the invested value, this implies we only need to write calls against 6% of the position in order to pay for secure storage. As we will be selling each unit for 5% to 10% above face value, the cash position will cover the risk of loss. As a result, I feel there is a very low risk of breaking the fund's model of retaining one tenth of an ounce of silver per unit. In short, should we get called on such a small position, we will have more than enough cash on hand to settle with no risk to the holders. Failing that, please see clause #5 in the contract.


=Definition of the Market======
TL, DR: I have a passion for silver. Silver has been money for even longer than gold. Many languages in the world use the word silver as the word for money. The world's supply of silver is precariously low in comparison to historical supply. There is a historical ratio of 15 or 16 ounces of silver to one ounce of gold (due to mining supply), however due to industrial use this has fallen to a 1:1 ratio. Therefore I personally feel the silver story is more than just unique. I believe it presents an opportunity that will change the lives.


=Products and Services======
Product: None, however one share (unit) is guaranteed to represent 1/10th of an ounce of silver, redeemable upon demand.

Services: Exchange program
We will allow investors to exchange shares of SILVER for physical silver on a 5 share for 1/2 oz round basis (or for larger denomination bars upon request, should we have them available). There will be a 1 share fee for shipping anywhere in the world per 10 oz.


=Organization and Management======
Organization and Management:
I am the issuer and responsible for the daily operation of the company.

We have also hired an advisor to provide oversight and prepare financial reports.

Shareholder motions require 60% to pass.

Any shareholder with 5% or more can raise a motion.

I will maintain a forum thread and I will listen to and respond to the community's advice.


=Marketing Strategy======
Out of the profits of the fund we will attempt to buy advertising on bitcoin-based websites like bitcointalk, feedzebirds, or any other community-based advertising services.

I am planning to spend ~10% of revenue on advertising. Not too much, basically just that or a little less.


=Financial Management======
Start up costs will be around 10 BTC for initial advertising and to retain our financial advisor.
I plan to retain 1/3rd of net profit into the company's cash position, take 1/3rd as management fee, and pay 1/3rd as distribution to shareholders.