Well, gigavps dumped 20000 new bonds onto the market at 1btc/share, without offering previous investors any kind of compensation or gain. (making around $50000 in cash)
Whether he realizes this or not, it demonstrates carelessness and lack of concern for current investors in order to please potential future investors, and to get money up front, mere weeks after selling the initial shares.
I could completely understand why someone would never want to do business with him again, and investors are cutting their losses and exiting what now seems like a pretty questionable business.
Thank you for continuing to be ignorant.
Giga did not dump 20,000 onto the market - he made a private placement and employed several people to assist with selling the bonds - that is quite normal, as it takes quite a lot of work. If you want to see what happens when you simply place it on market, read the howls of anguish over in the YABMC thread.
Second, the price was not 1.0 and depending on how/who you purchased from, it was higher than that. I am unsure of the eventual weighted price as I didn't buy any, but it was probably in the 1.2 to 1.3 range.
Giga has a sensible business and plan to make things work on a scale most people couldn't conceive of. If someone wants to panic after thinking they could make a quick buck off these bonds, they were misguided - markets have a way of leveling these things out.
As it is, they are a good buy (@ 1.0 which they are currently) and I look forward to a nice yield. (and I got some yesterday at 1.38).
This.
Giga has not ripped off anyone......he has stated the terms of the bond, is living up to those terms, and it makes NO DIFFERENCE how many total bonds are outstanding as long as he continues to meet the obligations to each bondholder.
That is all.
I agree that giga hasn't broken any of his obligations, just that the supply of available bonds has greatly increased, while demand has remained roughly constant in the near term. For this reason, People who bought in over 1 btc have taken a large loss on their investment.
What if the total supply of bonds went up to 80000 or 160000? The demand can't keep up with the supply, and the price will tank, since there is only so much capital that can flow into the GLBSE at any given time.
Say Chevron issues 100000 bonds and you buy one at a fixed coupon. If they then issue 400000 bonds 2 weeks later with the same coupon, your original bond will probably drop (in this case maybe only slightly) in value due to the increased supply of those bonds.
In any case, I agree that 5MH/s for 1 btc is a good deal--I thought it was a good deal at 1.5btc too. I think people just need to be careful not to flood the market with mining bonds.
This is correct. By increasing the amount of bonds in existence, the price of bonds naturally came down. But that's just like every other consumer product. When Apple puts a new item on the market, they start off only making a "small" number of them and the price is high. But when the early adopters have bought them all up, Apple makes a much larger order and the price comes down. Think about how expensive the first CD players were. They were like $2,000. The early adopters always pay the highest price. Then they get made by the gazillions and everybody else buys them for cheap. Now you can get a CD player for free.
Just because the price of the bonds have come down does not mean that those people who bought them at 1.5 BTC have made poor investments. So long as those bonds yield over 1.5BTC over the course of their lives, it's a winning investment. The people who are buying bonds now at 1 BTC are getting an even better deal.