The "do not invest" excuse might fly, if this contract was drafted before people bought shares. Guess what.. THEY ALREADY DID. And
And now you and DIablo consipire to alter the contract post factum to rob those investors of what little equity they have left.
If you really want to implement the most stupid contract ever, go ahead, but liquidate the company first or buy the existing investors out for a price they agree to. Anything less is breach of contract and fraud, plain and simple.
Topic: Diablo Mining Company - page 20. (Read 96370 times)
That's an interesting perspective, and I will pass it by Nefario, but we will be sticking with the plan as stated for now -- no matter how you slice it, if a business cannot afford to pay the employees, it cannot afford to operate. Plus if you think it through, expenses are just not going to be 80% of the company. I would be personally surprised if they ever went over 20% for a project like this. The plan itself is brilliant -- solar power (and reselling into the grid) and selling spare capacity in the form of web hosting and dedicated servers.
There will be plenty of time to sell or buy shares if you disagree with this plan. Right now 20% gross will be less than $40 a week after exchange rates and there are no expenses other than trading fees. There will be zero gain or loss to company cashflow because of this until we start to get up into the $100k - $200k range. You will have plenty of time to buy in or sell out by then. Simply put you are welcome to disagree and not invest -- this is not about making DMC appeal to every investor.
This is, and only is, about making DMC a transparent, stable company, and guaranteeing the trust placed in Diablo. That's it.
There will be plenty of time to sell or buy shares if you disagree with this plan. Right now 20% gross will be less than $40 a week after exchange rates and there are no expenses other than trading fees. There will be zero gain or loss to company cashflow because of this until we start to get up into the $100k - $200k range. You will have plenty of time to buy in or sell out by then. Simply put you are welcome to disagree and not invest -- this is not about making DMC appeal to every investor.
This is, and only is, about making DMC a transparent, stable company, and guaranteeing the trust placed in Diablo. That's it.
How exactly does this "guarantee trust placed in Diablo"? Diablo is indeed on trial by shareholders for gross incompetence and mismanagement, and for obliterating shareholder value, and you think giving him 20% of every trade is the solution? I think not.
And I also think you have no say in this, or at least no more than the amount of shares your 50 BTC investment would entitle you to. Diablo breaching his contract and giving you thousands of shares, so you can vote in his favor has fraud written all over it.
People who are stating that "no business pays it's employees out of gross" have not thought through how this system will work. The basic idea is that if the company does not make money, management does not get paid -- that is common knowledge.
However, if case of your proposal, if the company does not make money, Diablo does get paid, because he gets 20% of income, regardless of expenses. Profit = income minus expenses. The fair way to do this is pay Diablo X % of profit, not income.
I have thought this through and come to the same conclusion as people who object to the proposal. Your reasoning is flawed or at least very vague.
As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.
No. He's made investments in mining bonds which are, for the most part, pretty much guaranteed to lose value over time and may even lose value at a greater rate than they pay out dividends. usagi's proposal involves giving him a fixed 20% of the revenue from everything - including those mining bonds - effectively incentivizing him to invest in bonds that are guaranteed to wipe out shareholder value rather than making investments that will actually grow. (Also, he's diluted the holdings of existing shareholders massively by trading newly-created DMC shares for shares in other GLBSE assets at ratios which severly undervalue the DMC shares.) 
I see you found an excuse to ignore pertinent questions, pretending to be insulted by an ad hominem. However, its merely a statement of fact:
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"6: I'm well aware of how markets work, I'm not going to bid up (or pay too high a price) for the bitcoin miners after the IPO just to get my hands on their shares. If I did that the NAV would fall after the IPO because I'm an idiot of a trader. I wish to avoid that at all costs."
https://bitcointalksearch.org/topic/glbse-bitcoin-mining-fund-see-post-2-for-faq-81993You did precisely that and burnt 40% of your investors money (probably closer to 80% if they actually wanted to get out). So you are an idiot, get over it. With that established, lets get back to the topic at hand:
no company pays its CEO 20% of its REVENUE. Particularly not when 99% that "revenue" is insufficient compensation for the eroding value of the company assets. Its like putting $10K in a fund and drawing $1K from it each month and calling it "revenue".
Under your contract, Diablo would be entitled to 20% of those monthly payments. Do it a few times, by putting the coupon payments back in to a fund (or mining bond) and after some time Diablo ends up with virtually 100% of the company's assets. Idiotic is too mild a term to describe this.
The real problem is fixed mh/s mining bonds. They are the worst wealth destroyers Ive ever seen. Youd be better off investing your money in hookers and blow at least you would get something out of getting "screwed"
Correct with assett backed mining you should get almost 100% of the USD value of your investment back, under any circumstances, even if USD/BTC and difficulty rise sharply.No you just lose less as you can still sell the gear on the second hand market. With bonds you dont even get this.
I used to be in a mining company so i know what happens when the difficulty outpaces the ability to grow the mining cluster any further and its not pretty.
It goes like this -
Mining company that grows to keep up with or outpace difficulty = good
Mining company that doesnt grow = bad.
Fixed mh/s mining bond= worst.
Thats just been my experience the last 12 months to 2 years there is no trolling involved
he massively destroyed shareholder value.
As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.
Isn't it in their interest for him to succeed?
How the hell replacing him as CEO is going to solve anything?
When there is no good option to buy, you don't have to buy the least worst option (like "it destroys capital only half as fast as my current investment, therefore i buy")
Just buy nothing.
But that requires serenity.
Edit:
Yes he has this visions, but IMHO he has not the capability to turn them into reality, and more severe he doesn't realize that he is not capable.
It could work if he gathers the right people around him.
I think it would even work better, if he would just do the executing part and not the supervising and calculations.
He has proved excellent excecuting skills (programming) with his mining Software, for the rest, well look what has happend to DMC.
He turned it into a financial institution, completely leaving his skills dormant and his weak spots open.
The real problem is fixed mh/s mining bonds. They are the worst wealth destroyers Ive ever seen. Youd be better off investing your money in hookers and blow at least you would get something out of getting "screwed"
Only mining revenue will pay dividends.
I guess he should get dividends returned.
Stakeholders are the ones who are greedy... Always...
So what did DMC get for those extra 14 000 shares ?
it destroys capital only half as fast as my current investment, therefore i buy
I thought ASICMINER was a decent investment considering they are "revving up."
How do you suppose you pay dividends if it just sits?
Buying nothing is stupid. Serenity? I am sorry but serenity is for rocks.
I think he might have misjudged on the dividend part.
he massively destroyed shareholder value.
As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.
Isn't it in their interest for him to succeed?
How the hell replacing him as CEO is going to solve anything?
God, everybody ganged up on poor Diablo... This guy helped me out a lot to get my 4x7670s setup when there was nothing on them on the net. He also runs a DC for living. He's a mod and probably the best coder I've seen. Stop throwing accusations, I don't know how this helps your case.
Do you know how much time and effort he is putting into this? A lot.
Far too much. Had he done diddly squat, his investors would have been ~20x better off. And they still would be better off now if the company was simply liquidated, rather than letting Diablo pocket 20% and ruin what little is left of the rest.
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When this gets big
How on earth do you expect this to become big? No sane investor is going to pump new money in to this and In 3 months you wont be arguing over 2000BTC anymore, but 500.
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The simple fact is, this is a major undertaking,
Dreaming is such a hard job..
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and the 20% rate is quite fair. Again, considering real-world companies that only pay out 3 or 4% a year, DMC paying out 40% of it's profit each month is a really good deal.
You are an idiot. There is no profit, there is only massive losses. And no company pays its CEO 20% of its REVENUE. Particularly not when 99% that "revenue" is insufficient compensation for the eroding value of the company assets. Its like putting $10K in a fund and drawing $1K from it each month and calling it "revenue". Its hilarious.
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Why does everyone keep talking about the trade between usagi and diablo? Sorry, but I partook in just 20% of the total shares traded in the ASICMINER deal. I traded 4200 out of 18700.
Yeah and you got them for 50 BTC while early investors would have invested 4200BTC for it. How would you feel if Diablo traded his remaining 100,000 shares for 10 BTC?
I don't like this 20% plan.
The simple truth is that DMC is only about 1600 or 2000 bitcoins in size. If it makes, say, 20 BTC in a week, that means Diablo gets 4 bitcoins. That's $40. Do you know how much time and effort he is putting into this? A lot. A lot more than $40 a week. When this gets big, even when it gets up to $100k US in size, he will only be making $100 or $200 a week after the block reward cut and ASICs. That's at 20%.
The simple fact is, this is a major undertaking, and the 20% rate is quite fair. Again, considering real-world companies that only pay out 3 or 4% a year, DMC paying out 40% of it's profit each month is a really good deal.
The basic question is: Can this company afford to pay Diablo-D3 what a datacenter manager SHOULD be paid? 20% sounds about right, actually, considering his level of involvement in the project.
What if Diablo were given shares instead? It's not uncommon for people to be paid in options at start-ups.
That is true. Either way there will be value coming out of the company. I'll talk to Diablo and see what he thinks of the idea.
I'm glad to see that people are working to resolve this. After that drop from 0.6BTC/share to 0.04BTC/share, something definitely needed a change.
Also, I still don't like this trade between usagi and diablo. You can talk about it in terms of MH/share, but that doesn't get around that fact that usagi essentially bought shares available to anyone else at ~.6BTC for only .012BTC
Also, I still don't like this trade between usagi and diablo. You can talk about it in terms of MH/share, but that doesn't get around that fact that usagi essentially bought shares available to anyone else at ~.6BTC for only .012BTC
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Why does everyone keep talking about the trade between usagi and diablo? Sorry, but I partook in just 20% of the total shares traded in the ASICMINER deal. I traded 4200 out of 18700. Thats 22%. I'm a minor player regarding that trade. I even lost my standing as majority shareholder. I simply approved the idea as the 60% shareholder at the time. Seriously, if it went to motion, it would have passed. I discussed this with nefario and coldhardmetal at the time. Diablo is NOT ON TRIAL HERE for the Asicminer trade. he announced what he was doing and did the trade with several people over the course of a week. That is not and never was what this was about, despite a great number of very vocal non-shareholders that shouldn't be commenting here...
Remember. He was NOT REPORTED for the ASICMINER trade. he was reported because he had not bought hardware and had repeatedly refused to buy hardware in violation of his contract, while at the same time announcing other plans like building a solar farm. THAT is what this is about.
Everyone is talking about it because whenever anyone reads that shares worth .6BTC were sold for .012BTC, they can't believe that this agreement is actually in the best interest of the DMC shareholders. This thread is about DMC in general, not just his alleged violation of the contract or being marked as a scammer. That is why I put "Also" at the beginning of my sentence; it was a separate idea that I had not yet voiced my (shareholding) opinion on. However, I am sorry that I only mentioned your name rather than all of the parties involved with the ASICMINER trade. Remember. He was NOT REPORTED for the ASICMINER trade. he was reported because he had not bought hardware and had repeatedly refused to buy hardware in violation of his contract, while at the same time announcing other plans like building a solar farm. THAT is what this is about.
20% is the steepest I've seen across my GLBSE holdings for management fees etc., whatever you want to call them.
How is this warranted?
How is this warranted?
If he designs, builds, and manages a million dollar data center, I think paying him $200k is fine. Plus, 40% of net to shareholders is a lot. Most companies in the real world pay 1 to 5% in dividends per year. This way, shareholders still get 3 or 4% a month. I think it's a good deal.
Another way of looking at it, is that this is incentive for Diablo to do a good job. If he does it right, he gets paid. Management incentive was something missing from the previous contract. Now that it's in, I feel confident we can move forward. A little accountability and transparency goes a long way.
What if Diablo were given shares instead? It's not uncommon for people to be paid in options at start-ups.
I'm glad to see that people are working to resolve this. After that drop from 0.6BTC/share to 0.04BTC/share, something definitely needed a change.
Also, I still don't like this trade between usagi and diablo. You can talk about it in terms of MH/share, but that doesn't get around that fact that usagi essentially bought shares available to anyone else at ~.6BTC for only .012BTC
1. Did you obtain a significant number of DMC shares (4200 from memory - could be slightly more/less) in return for assets with under a qurter of their value (both from GLBSE valuation of DMC sahres AND valuing DMC shares at nav/share)?
As I told you this situation has been outlined to you several times. Please see the NYAN letters to shareholders, and my post to this thread detailing the situation leading up to DMC being frozen. But since you obviously have trouble reading or following simple directions I'll answer your question yet again, with the stipulation that if you ask me again I'll report you for trolling/spamming these forums. Seriously, you're annoying.
The answer to #1 is: no.
The explanation is: We did a trade for mHash/share value. I was 60% majority shareholder at the time. I explained the trade to nefario and coldhardmetal at the time. Nothing underhaded or sneaky was done. You simply don't understand, and think you're some kind of news reporter. You're not, and you're getting really annoying. This is the fourth time this has been explained to you.
I'm only going to address this one - as you KIND OF answered my question, without actually really answering it. I didn't ask you to justify the trade I asked whether the trade was for assets worth under a quarter of the value of the DMC shares you obtained.
You traded 500 shares of ASIC for 4200 shares of DMC.
500 shares of ASIC was worth approximately 50 BTC (that's the value you said you paid for the DMC in your letter to shareholders).
So you gave DIablo the equivalent of 50/4200 BTC per share = approx 0.012 BTC per share.
In Diablo's last report here (AFTER the dilution of NAV by those 4.2k shares AND all the others) nav for DMC was still over 0.05 per share.
So I'm really not seeing how yo ucan claim the answer is "No" to whether or not you obtained those DMC shares at well under nav/share. You can obfuscate that by talking about mHash/share - but that was not the question I asked.
Not surprising you didn't even bother answering #2 - as even you'd struggle to keep a straight face and say "No" to it. Instead you gave your stock response of "you don't understand" - but then backed it up with absolutely zero facts about what it is I "don't understand".
5 BTC was a cheap price for you to reverse your opinion from "Diablo is totally incompetent" (paraphrase - not gonna look up exact quote) to him being competent. Don't suppose you got a promise from him to buy insurance as part of the deal?
I'm done in this thread now btw - so don't feel any need to reply to me: if the shareholders aren't interested in an explanation then I agree there's no point me flogging a dead horse.
I'm far more disappointed in the way the shareholders allow you to pull wool over their eyes than I am that you exploited DMC's incompetence/ignorance/desperation to get ASIC shares for the benefit of yourself and/or your shareholders in other companies you run. And yes - the other 14k DMC shares handed out (or whatever happened with them) are probably even worse (for DMC shareholders) than the trade you did. Shame you now appear to have no interest in finding out what happened and (possibly) reversing it and would rather sweep it all under the carpet.
I think by this point it has become obvious you should take this to PM. It's not about your post count, it's about you failing to understand what is going on here.
I think by this point it has become obvious you were intending to spin your way around any questions asked, rather than address the actual issues. Not everyone wants things to be resolved behind closed doors, on irc or in PMs between people whose motives may not fully align with those of the other share-holders.
Just take it to PM unless you have something of value to add.
I believe answering my earlier questions would add value for shareholders in assessing your proposal.
To repeat:
1. Did you obtain a significant number of DMC shares (4200 from memory - could be slightly more/less) in return for assets with under a qurter of their value (both from GLBSE valuation of DMC sahres AND valuing DMC shares at nav/share)?
2. Do you agree that Diablo trading you those shares lowered the current value (nav/share) for all existing shareholders in DMC?
3. Do you believe you SHOULD be allowed to keep those shares?
4. Would you end up keeping those shares if what you propose happens?
Four yes/no answers is all that's needed. If the answer to #1 is "No" then no need to answer the others.
Let's start with your conclusion first:
Your plan says absolutely NOTHING about Diablo's competence.
Your plan says absolutely NOTHING about Diablo's competence.
Diablo's competence is not the subject of the motion. This isn't a popularity contest, sir. As for competence, Smickles will be hired to prepare full, transparent accounting statements. Secondly, diablo will be responsible to shareholders via motions. If he does not keep his contract then he will be removed. Additionally, there are now well-defined limits on DMC that Diablo feels comfortable operating within.
I was responding to you saying:
"This simple 3-step plan shows that Diablo-D3 is competent enough to manage DMC and is the best person for the job."
It does NOT show anything about his competence. His basic ability to competently trade securities and manage investors funds has not changed as a result of you making that post. IF he explained what he'd done wrong/badly in the past -and how he'd avoid making the same mistakes - then that MAY be evidence that he's now more competent than he was.
Why would we believe your claim that "If he does not keep his contract then he will be removed."? Are you saying you believe he hasn't already broken his contract?
I think by this point it has become obvious you should take this to PM. It's not about your post count, it's about you failing to understand what is going on here.
I think by this point it has become obvious you were intending to spin your way around any questions asked, rather than address the actual issues. Not everyone wants things to be resolved behind closed doors, on irc or in PMs between people whose motives may not fully align with those of the other share-holders.
I have a fundamental disagreement with you on dividends (not just here, but in your own companies). You seem to believe dividends are paid based on revenue, I believe they should be paid based on profit (there are exceptions to this - but not ones applicable here).
My companies have nothing to do with DMC other than some of them hold DMC shares. But for the record, you have (in the past) demonstrated a clear misunderstanding of how I run my companies. As I told you many times before, we only take management fees from profits. You seem to think we don't do this (but we do), which is at the root of your misunderstanding. If BMF, for example, doesn't turn a profit, I don't make any money. That is very fair. Now please focus on the issue at hand, DMC.
I did then focus on DMC - but you failed to quote or address my points about your proposed contract paying his salary even if a loss was made. Yes - that's what a salary IS - but rewarding someone for massive failure by then giving them 20% of future revenue irrespective of whether any proft is made?
And yes - I've misunderstood some aspects of how your companies operate in the past. So whenever you've responded to me you've only addressed the bits I was wrong on then pointed to my post count and laughed: totally ignoring the other issues raised. True to form you've done the same here.
Still no response to me asking:
"You may only be getting paid 5 BTC to represent Diablo, but you also received a large chunk of shares (far more than you already held) at a huge discount to nav. Am I correct that in your proposal you'd get to keep those?"
I'll rephrase it as simple yes/no questions that you can (hopefully) answer without needing to discuss my post-count:
1. Did you obtain a significant number of DMC shares (4200 from memory - could be slightly more/less) in return for assets with under a qurter of their value (both from GLBSE valuation of DMC sahres AND valuing DMC shares at nav/share)?
2. Do you agree that Diablo trading you those shares lowered the current value (nav/share) for all existing shareholders in DMC?
3. Do you believe you SHOULD be allowed to keep those shares?
4. Would you end up keeping those shares if what you propose happens?
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