Topic: Critique of the various businesses run by usagi - page 4. (Read 5406 times)

In the case of Nyan, its.., braindead as you pointed out.
I dont believe Usagi is able to keep his 1 BTC buyback promise much longer. He is already not honoring the asks, and to use his own words: he is "desperate". Thats what you get when you buy the most worthless shit and fool yourself by falsifying your stats and constantly try to manipulate market prices, both of his own shares and other shares he owns to make those stats seem right. You buy paper value for a short while, but in the end you lose money. Lots of it.

Just over a week ago I calculated his actual NAV for all Nyans, and Nyan.A was in no imminent danger, it was only C which would be wiped out entirely and B would lose about 1/3 its NAV. Bad, but not catastrophic.  Today its getting so bad that B is in danger of being wiped entirely out if he actually did what his contract obliges him to (transfer assets from B to A to restore As NAV), or if he pushes ahead and liquidates and delists B before he full fulling his obligation to A holders. Both have the same effect, it would leave A with no credible protection.

In the case of BMF, there is another issue,  he risks diluting his existing shareholders. Well, he would be if he would actually sell those shares at 10% under NAV, which he wont, since he calculates NAV as GLBSE average * rand(1,10) + 10 / (atmospheric pressure in Tokyo + his shoesize) ^ his IQ. Despite his low IQ that still ends up way above any reasonable NAV estimate even after a 10% discount. IOW, he will probably not sell a single share to a large investor with an IQ bigger than his shoe size; but if he would, his existing shareholders should be pretty upset about it.

GUARANTEE?  WHAT GUARANTEE?

One of the (on the surface) appealing features of nyan.a is that its value is guaranteed to shareholders not to fall below 1.0 BTC per share.  This is described in the contract as:

"The value of NYAN.A shares is guaranteed by CPA and NYAN against capital loss via the reasonably timely maintenance of a bidwall at 0.99 bitcoins per fund unit."

There are THREE seperate very good reasons why this guarantee is meaningless.  I'll ignore nyan for now (its current assets are essentially just some BMF share) and discuss CPA.

REASON ONE (fairly minor one in fairness):

CPA is currently unable to maintain the bid-wall DESPITE there actually being little reason to sell nyan.a right now (other than the one detailed in this post).  There have been Asks up for days now which aren't honoured despite usagi being well aware of that.  Now I DO believe that usagi will clear those asks when it gets funds near the weekend - but clearly CPA doesn't maintain sufficient liquidity to cover its obligations.

REASON TWO (Pretty massive one):

The test of a party's willingness to honour their obligations is how they've behaved in the past.  Ideally we'd like to look at some other situation where one of usagi's companies was insure by CPA.  Luckily we can - all the gory details are here :

https://bitcointalksearch.org/topic/m.1229467

In brief, CPA (usagi) insured BMF (usagi) against BMF losing NAV.  When BMF lost NAV (usagi's special area of expertise) the insurance policy was not discussed, claimed upon or mentioned again.  If usagi didn't honour the policy with BMF why should anyone believe (an even less formal) guarantee for nyan.a

REASON THREE (Pretty huge as well)

In usagi's latest fairy-tale, it says:


So, let's get this clear:

Half (roughly) of nyan.a's holdings are BMF.
Nyan.a is insured by CPA.
CPA's only assets of any note are BMF.

So if BMF collapses/largely devalues (through mismanagement, theft, a big drop in mining profitability or whatever) - WHERE does CPA get the funds from to cover its guarantee?  You CAN'T meaningfully insure something if the insurance is covered by the very thing that is insured.

Even in the event of a fairly small drop in BMF value it would become impossible for CPA to liquidate its BMF holdings to honour its guarantee.

You'd think usagi would have learned this lesson after the pirate fiasco - where the funds covering the insurance turned out to, in some cases, be with pirate (this is NOT an accusation against usagi in respect of that - I DO believe usagi was misled by those with whom it deposited in some cases).

Not only is this sort of insurance cover wrong and meaningless - it's also specifically against the contract of CPA.  I quote:

"5d. limited segregatability (de-risking sector default/widespread default)
To mitigate the risk of the default of an entire sector, THE CPA will seek to issue no more than 25% of it's coverage to any particular sector and will and to not insure assets using other assets from the same or similar sector. For example, we will avoid securing assets of a mining company with assets from other mining companies. In cases where this is unavoidable we will limit segregatability to pay claims on a first-come-first-serve basis, with the actual contract holders for the default event taking first priority. "

Now, inadvertently ending up in this situation is NOT (of itself) a breach of the contract.  But CPA SHOULD be acting to get its funds properly segregated quickly - right now EVERY insurance policy it has out rests on a single asset (BMF) which doesn't exactly have a stellar record of growth expressed in BTC.  And, whine all you want, about how it's gained in USD - how many of CPA's insurance policies are denominated in USD? (I could be wrong here - it may well be that CPA actually doesn't have any/many other policies out).

But it does raise the question:  WHEN did CPA's holdings in BMF go over 25%?  HOW did they get to nearly 100% without it ever being noticed?  Has CPA actually been BUYING more BMF even after it had passsed its own 25% rule?

SUMMARY : the "guarantee" is meaningless.  CPA doesn't maintain the liquidity to honour it, didn't honour a similar guarantee for another usagi company and (in the most likely scenario of significant cover being needed - a drop in the value of BMF) would be totally unable to honour it due to no longer having the assets to do so even it wanted to.

Usagi is trying to put all its eggs in one basket:


The eggs (BMF) are already scrambled - and the basket (CPA) is an illusion.

[Local Rules : Anyone can post in this thread, even people who are confused over their gender, can't do basic math, view failure as doing well and in general lack any idea of how to run a business]

GIVING AWAY MONEY

Think this shows just how dumb usagi is.


Now let's think about this.

Nyan.a's contract specifically commits that CPA/nyan will maintain a bidwall at .99 for nyan.a.

nyan.a shares sell at 1 BTC.

10% off 1 is .9

So usagi is offering to sell nyan.a shares at 0.9, having offered a guarantee to buy them back at 0.99.  That smells like giving away money for free to me.  Buy at 0.9, list at .99, wait for contractual obligations to be fulfilled, rinse and repeat.

Or is the 10% off some imaginary RMV?

And who foots the bill for that 10%?  The investors?  CPA?

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Coming next post : Guarantee?  What guarantee?

Note: I have decided to cease posting in usagi's own threads.  I don't believe local rules banning me are wise, should be enforced or are in the interests of usgai's investors.  However if usagi won't respond to them then they DO end up effectively being trolling.  I would encourage any investors in usagi who believe any points I raise merit answer to ask the questions themselves - then, maybe, you'll get an answer.  I expect usagi to answer THIS post but not the next.