Topic: [CLOSED] S.DICE - SatoshiDICE 100% Dividend-Paying Asset on MPEx - page 96. (Read 316363 times)

I have less than 1 btc in my wallet. So I guess I will skip this IPO.

Agree. I had been hoping SD were going to open up to investors but this IPO is a tragedy. The point of it should be to raise capital to re-invest into SD in the form of raising betting limits. As people clone the site and create alternate sites the only way to remain #1 is to take action from the highrollers. This requires a massive bankroll which investors could help provide.

I feel that SD easily proves you can know exactly what the risks in playing are, and that's certainly (rather popular) gambling.

External Risks:

- SatoshiDICE growth and/or other uses for bitcoin frequently causes blocks to become full (500KB limit)
This can be from Bitcoin reaching tremendous uptake as a payment system, or a competing blockchain-based wagering service takes off as well.
(Though SatoshiDICE could overcome this by moving away from doing blockchain-based wagering to having a site and a wallet.  Changes its essence doing that though.)

- SatoshiDICE wants to hire staff, gets stuck at line 1 on form as unable to come up with an EIN  

I find it "interesting" that someone claiming to represent a stock exchange company believes that examining the underlying risk of an investment is not important. Isn't investing without knowing the risks called "gambling?"

Who are you again?

I think Mr Popescu needs to hire better marketing people.

That's a fair point. But it calls into question what is the plan for growing the site?. I mean, the only way this deal makes sense is for share price to rise, the dividends alone are not very attractive. So, if he is *not* reinvesting money into growth, then what?

Anyway, I agree with your larger point. Priced at about a 4x multiple, this deal would be very attractive.

Personally I think he is doing himself a big disservice. Its a strategic mistake to sell a paltry 10% non-voting shares with such lackluster terms. If he made his first tranche of investors a good deal - something that was clear would at least hold the share price - it would set him up get his 10x multiple on the next bigger 20-30% chunks he wanted to sell.

As it stands now, the next time he wants to cash out a portion he is going to be adding lots more shares to the market and people will be still underwater from the first release. Its all ass-backwards.

I stated it in one of my previous posts, but I believe the extent that it has 'proved itself' holds less value than you may think. While it is at the 'top of the food chain', a very low barrier to entry allows for competitors to continue to compete. It is awfully presumptuous to think Satoshi Dice will hold a monopoly well into the future. Regarding the dividend,  paying out all of the profits may not even be the best route. A clearly defined strategy of partial reinvestment of earnings along with a healthy growing dividend could be a better option. Though 90% of ownership is still held by the owner, and he has stated the intent to further investment in the brand, so that may not be an issue.

I agree, overall, Satoshi Dice is a top tier operation relative to other BTC ventures. But even great companies can have unattractive stock prices.

Then again, how many "traditional" IPOs pay out ALL net revenues in dividends? While I agree that the P/E needs to be discounted from 10 because the risks are understated, it is also fair to say that some credit is to be granted for paying out the revenues.

Is Mr. V cashing out 10% and sticking shareholders with the risk? Yes he is. But shareholders are 1) getting the dividend and 2) getting exposure to upside. This is worth something. It's also not fair to compare SatoshiDICE to other ventures that only cost 2 or 3 times earnings. SatoshiDICE is at the top of the food chain, has already proven itself, and has considerable corporate goodwill.

I believe that a 10 P/E is overpriced. A reasonable value would be 5 to 7. It should be listed on GLBSE so that I don't have to worry about liquidity problems of a fly by night exchange that wants $200 entry fee.

My prediction is that a couple of million shares of the initial offering will sell. The rest will sit on that crappy exchange. After a while someone will put their shares up for sale, get no bids, lower their ask, and we will see the price come down to the range I gave (losing 30% to 50% of share price). Then people might start getting into it. Over time we should see the price go up steadily. It will be extremely volatile especially if there is any news. For example, advertising appearing in magazines. Or the new website being rolled out.

If anything happens, like the domain is seized, or a server is hacked, or Mr. V gets a national security letter, we will see the thing tank. God forbid a dividend payment is missed.

Another possibility is that Mr. V is pricing the IPO high to get the early adopters, and will lower the price for the remaining shares that do not sell. This discriminatory pricing technique can maximize revenue.

I am not 'strong-arming' anyone. I don't expect anything I say to change what the issuer will price this IPO at. I, however, enjoy discussing all theory and practice of investing and finance. I always attempt to do my due dilligence, and am meerly sharing my findings, thoughts, and opinions with others.

The section I quoted of your last post exemplifies your bias and your unwillingness to accept uncertainty.

To tell anyone for certain that you know the future is dishonest. I find that to be terribly unprofessional, and I am somewhat shocked to see a statement such as that come from a "PR" account.

Two points need to be spelled out here.

A. The lists of "risks", real or perceived, is this nonsense that VAs throw at first-time founders in the hopes that they may be strong-armed. Nobody sitting at this table is a first timer. I could make you a list of 100 risks related to connecting to an internet forum, or to getting out of bed in the morning. Let's save this entire line for fresher turnips, it's a shame to waste it on this occasion.

B. The pretense is that investors are somehow in a strong position in this deal. This is patently false. There are potentially nine and a half million btc to be invested, that's three hundred times the total value on offer. That's right, there's three hundred of you. There's just one SatoshiDICE!

For all the talk about "btc risks" we all know what the real story is: in a couple of years btc is solidly in two figures, mining is barely profitable, in the commodity range (say, 1%?) and there's just not that many revenue streams to be had in a purely deflationary currency. Those are the risks, and you know it, or else you wouldn't be here in the first place. "The risks" are that if you lose out now you will never, ever, ever meet this deal again.

That's about it.

I can't claim to have extensive experience regarding this, but my advice to you is to create a legal entity. Someone such as an LLC which creates a proper structure could be very beneficial for both you, as well as investors. If something were to occur in which you were unable to perform your duties, what would happen? Also, using an LLC, you can protect yourself from certain legal issues. I highly urge you to look into your options. Regardless if your website is worth $30,000, $300,000, or $3,000,000 or even more, I think getting yourself and investors protected legally is quite important.


Could you provide specific projects, methods, and forms of implementation which will lead to future growth? In my mind, your growth prospects are one of the largest variables in attempting to justify the IPO pricing. Getting a clearer picture of future plans and potential would be much appreciated.


Does the reserved BTC sit in a wallet, or is a portion of it invested? If it is partially invested, could you provide please provide a holdings statement?


This is one of the points that makes me feel that the x10 P/E ratio for the IPO is a bit lofty. We can agree that BTC is volatile and has a very uncertain future. Any company that deals primarily (or completely) in an unstable currency carries that same risk. Other than an extremely unstable currency, there are many other differences between Satoshi Dice and majorly listed companies:

-Shares have 0 voting rights
-Shares are issued by a single individual, not a legal entity (much higher risk to investors)
-Very short existence so far vs traditional investments (despite short-term success, I would not say Satoshi Dice is 'proven')
-In comparison, very little information and transparency compared to major companies
-The majority of the raised funds aren't even being reinvested into the company (99% of IPOs are raised to further fund operations and growth)

Applying a traditional valuation of x10 P/E is unwarranted.

The fact is, the majority of even the best managed and transparent BTC ventures trade for less than x2 P/E (and some under x1 P/E), simply because there are great risks. I think you have a great website and growth potential, but to be honest, even a x3 P/E seems lofty for something like this.

You're not assuming zero growth, you're assuming the stock price will remain unchanged, and you're not stating your assumption.  You can have growth and the price go down, as I'm sure you're aware.

Personally I think assuming anything other than decline from your current near-monopoly status is hubris.  Further, given the current "low" value of BTC (we can probably agree on that) and the fact you are denominated in BTC not USD (as I've mentioned elsewhere in this thread) means your BTC take will likely trend down.

So I stick with my previous point that anything over 2.5x earnings seems highly speculative, and that is indeed why we won't be meeting to exchange in the market    You're of course welcome to try and get whatever you can for your stake, and I wish you luck, but it would surprise me indeed if you manage to get anything like what you seem to expect, particularly after the initial "IPO".

Well of course it assumes the stock price is unchanged. It could go up or down. Honestly, it's likely to rise based on a number of reasons we could discuss, but I'm trying not to assume growth. I think assuming zero growth is legitimate for figuring out baseline dividend earnings... certainly more legitimate than assuming the stock price will halve in five years when there's no evidence of anything like that. There is only evidence of serious growth, and yet I'm assuming zero growth... that's fair, no? And of course you can make your own assumptions.

http://blockchain.info/popular-addresses

how do u know this?

Erik you need to stop repeating this without mentioning your assumption : that the stock price is unchanged.  It's improper.

Here's my alternative: when the stock price has halved over 5 years you'll be lucky to have broken even over those 5 years.

SatoshiDICE just hit 20k BTC in bids today, all-time record.

At 1.9% house margin that's 380 BTC in profit, in one day.

I'd say you answered all questions sufficiently.

Brushing off the concerns? I think I've answered just about everyone. You may disagree with my answers, but they are certainly not "brushing off" anything are they? If there is one I've forgotten to address please post it.