Topic: Diablo Mining Company - page 19. (Read 96370 times)

Well, man, one thing man...

You should have brought it up before buying shares because apparently no solution sticks with you.

For the record,  I am deprived, Factory, Bitcoinbear, puffn, Deeplink, ianbakewell, MoinCoin, EskimoBob, Newar and Red Emerald. Not too mention, Pirate.

Heh, far from it. Everybody is still watching you make an ass out of yourself.

Really, the way you are handling this situation has made me reconsider every other asset you are involved with. I was considering investing some money in one of your funds, but now I think that is a bad idea.

Indeed - and the means by which this occurs is detailed in the contract in the first place: not the case here.

And you are given a period of notice during which you can withdraw all your assets from them rather than agree to the new terms.

Diablo should get 50% of nav per share increases on a month to month basis based upon accounting by smickles.

Banks change contracts all the time.
Here is a situation why changing a contract is actually useful.

Let's say the contract keeps a company obligated working with a certain supplier but the supplier produces defective product. It is in company's interest to get rid of the supplier regardless whether there are shareholders who oppose the move. Now, how its done its another story.

Actually, since you started posting here, Ive only heard of one single presumed shareholder who seemed to think what you proposed was a good idea, and just a few posts ago, he started having questions too; questions you are not addressing. That you are the only one left thinking this plan has any merit is probably closer to the truth, but maybe you can still convince Nebulus.

You can't change the terms of the contract by motion.  Not you can approve any action which would breach the contract. The contract is between Diablo/DMC and each individual shareholder - with the rights/obligations of the contract transferred each time a share changes hands.

Passing motions IS done by voting on motions.  Change of a contract can only be done with the agreement of both parties to the contract.  Motions can't change the contract unless unanimously accepted.

Get it? No? Jesus you're slow.

Here's an explanation you can hopefully understand:

If you have 1000 contracts with someone and I have 1 identical contract with that same party then you can ONLY change your own 1000.  Not my 1.  Shares ARE a contract - their value is determined by the rights/obligations they confer/impose on the parties to that contract.  You can't change the contract of DMC unless you own, control or have the agreement of every single other share-holder.

Whine all you want about it.  Be as dismissive to everyone else as you like.  On this specific point you are totally, 100%, beyond any shadow of a doubt wrong.

If you want a changed contract for DMC you need the agreement of myself, puppet, deeplink etc.  You aren't going about things the right way to get that.

Then let us. Lets start by reversing my trade of 0.5 BTC per share.


You can motion all you want, as Deprived pointed out, it doesnt let you alter the contract, nor does it let you retroactively make contract breaches ok. But thank you for opening the eyes of anyone who still thought you were acting in good faith.The mask just fell off.

BTW, Diablo still has 100K or whatever unsold shares, by your logic, he can do whatever the heck he wants, including raping you after this deal.


Which is precisely whats has been going on here. Look no further than the thread title for a good example.

There are many other concerns and issues that can be talked about. I was choosing to simply focus on explaining why amendment 2a is an inappropriate addition to the contract in terms of compensation and consideration for all parties involved.

Its actually much much worse than that, because coupon payments from mining bonds are considered revenue. The value of mining bonds will  perpetually diminish, but Diablo would take the 20% of the coupon payments and not be impacted at all by the diminishing value of the underlying asset. 

Its really like putting  $100K in a bank account and withdrawing x% monthly, the withdrawals obviously reducing the value of the whats in the bank, yet Diablo pocketing 20% of those withdrawls every month as "revenue". You can repeat that game over and over and Diablo would end up with 100% of the company assets, even if he took a smaller percentage, all he needs is an investment vehicle that pays fat coupons but extinguishes itself equally fast. Mining bonds are already pretty good for that though.

You seem to be the only one who is not listening.


Yes. And I bought my shares at market value, I didnt fraudulently receive them like you did.

I am not a "new guy" nor a sock puppet. Please drop the drama and the emotional stuff.

As a shareholder I tell you that I do not want to sign the contract you are trying to force me into. You cannot change the contract after the deal.

If you offer an acceptable way out I may consider it. If not I just want to wait for the result of both the audit and Nefario's motion.

Yes, buy back my shares at IPO price so that I can turn around and buy a hell of a lot more for market price!

 

On another, more serious note, Factory illustrates a very good point, Usagi. Ignore the obvious troll(s), but please address his point.

It may have been discussed with many people, but it is very clear that none of them have any knowledge of business or finance in any kind of serious capacity.


Except that you worded the contract in such a way that he is being paid from revenue, and not from earnings. This is an egregious error on the part of everyone who wrote and "carefully reviewed and discussed" the contract.


You honestly believe that all of DMC's business activities can operate with a 80%+ net margin? That is completely outlandish.

What do you mean you would be surprised if they went over 20%? They will always go over 20% as long as DMC is operating.

DMC net income formula as per amended contract
i= r - (.2r) - e

i = operating/net income, ie. earnings
r = revenue/gross income
e = all liabilities/operating costs (excluding Diablo)

If e > 0, then net margin < 80%. You should not be surprised if expenses were over 20%, you should actually be expecting it.


You are talking gross income though, not operating income.

Consider this:

Scenario 1.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $50,000.
$150,000 is left as operating income. That is a net margin of 60%

So DMC retained $150,000 and Diablo was paid $50,000.

3:1 ratio. Payment to Diablo seems a bit high.
Scenario 2.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $100,000.
$100,000 is left as operating income. That is a net margin of 40%

So DMC retained $100,000 and Diablo was paid $50,000.

2:1 ratio. Payment to Diablo seems quite high.

Scenario 3.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $150,000.
$50,000 is left as operating income. That is a net margin of 20%

So DMC retained $50,000 and Diablo was paid $50,000.

1:1 ratio. Payment to Diablo is extremely high.

Scenario 4.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $200,000.
$0 is left as operating income. That is a net margin of 0%

So DMC retained $0 and Diablo was paid $50,000.

0:1 ratio. Payment to Diablo is infinitely more than what DMC actually makes now.

Scenario 5.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $250,000.
$50,000 is left as operating income.

So DMC lost $50,000 and Diablo was paid $50,000.

-1:1 ratio. Payment to Diablo is extremely high.

Do you see the issue here?

Compare those scenarios to the following:

Imagine Diablo is paid 20% of operating income instead of 20% of gross income.

Scenario 1.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $50,000.
$200,000 is remains.
Diablo is paid 20%, $40,000.
$160,000 remains as operating income for DMC and it's shareholders.

So DMC retained $160,000 and Diablo was paid $40,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 2.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $100,000.
$150,000 is remains.
Diablo is paid 20%, $30,000.
$120,000 remains as operating income for DMC and it's shareholders.

So DMC retained $120,000 and Diablo was paid $30,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 3.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $150,000.
$100,000 is remains.
Diablo is paid 20%, $20,000.
$80,000 remains as operating income for DMC and it's shareholders.

So DMC retained $80,000 and Diablo was paid $20,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 4.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $200,000.
$50,000 is remains.
Diablo is paid 20%, $10,000.
$40,000 remains as operating income for DMC and it's shareholders.

So DMC retained $40,000 and Diablo was paid $10,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 5.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $250,000.
$0 is remains.
Diablo is paid 20%, $0.
$0 remains as operating income for DMC and it's shareholders.

So DMC retained $0 and Diablo was paid $0.

1:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.


I am not saying 20% is a fair or unfair rate. What I am saying is that paying Diablo a % of gross income instead of a % of operating income is grossly inappropriate.

The argument that paying him 20% of revenue will be "incentive to perform well" is false. Paying him 20% of revenue is an incentive for him to simply bring in more revenue. That may sound good, but revenue means nothing if you do not control margins and are not mindful of them. Paying him 20% of operating income forces him to operate in a capacity that is beneficial for himself, shareholders, and DMC on a whole.

I apologize for this long post, but I wanted to fully illustrate the problem with the 2a clause of the amendment proposal in the most simple and easy to understand manner.

I am now a shareholder of DMC (I'm happy for nefario to confirm this if anyone doesn't believe me).

I'm not going to get back into long discussions about this.  I am, however, going to assert one right and make one firm request as a sahre-holder.

1.  My contract as a share-holder is between myself and DMC.  Other share-holders (and Diablo) may raise and and vote on whatever motions they like BUT they have no right to amend the terms of MY contract.  There is no provision in the contract for amending it.  The contract spells out how funds are divided and the uses to which they may put - those particulars are inviolate.  If a majority of shareholders in DMC would like to enter into a new (revised) contract with Diablo then you have two options:

a) Have him form a new company into which you invest.
b) Make an offer to myself and other share-holders who disagree such that we will sell our shares to you.

The ONLY way DMC's contract can be changed (and it remain DMC) is if EVERY shareholder agrees to sign the new contract - there is no provision in the contract, in law or in common business practice for one group of people (e.g. share-holders) to be able to vote away the rights (as defined in a contract) of others.

2.  Diablo is being investigated for imcompetence and/or scamming.  I don't know who initiated that investigation (made the complaint) nor do I know the specifics of it.  As a share-holder I request that the investigation be completed and its results made public before any other action occurs.

Yes, do that! Black Friday, GLBSE everyone!!!

+2

+1

I think it would be reasonable for Usagi and Diablo to offer to buy shares back from anybody who does not approve the contract change at the original IPO price.