Topic: Is the 'Price' of ASICMINER shares rigged? (Read 3092 times)

If it wasn't for people happily buying mining rigs (or indirectly doing so by buying mining securities) for more than they'll ever mine I'd agree with you.  The fact that they do means that the cap on mining doesn't actually apply to hardware sales - though there is an effective cap less than an order of magnitude higher (at the point where it's OBVIOUS to even idiots that the price is so high that it won't ever make a profit).

Going off on a tangent a bit here.  In general there are 4 groups of people in the mining chain (as it relates to securities) - 3 sets of whom make profit.

1.  The manufacturers (and their shareholders where relevant) - these make a profit selling for more than it costs to produce the hardware.
2.  The purchasers - these make a profit by selling shares in their mining either at a markup or with a fee structure where they receive a portion of revenue (not profit).   There's a sub-set of these who are fund managers - many of whom also make fees based on dividend revenue rather than actual profit.
3.  The resellers - these make a profit by buying at IPO then selling into the price bubble thereafter (I'm sometimes in this group).
4.  The suckers - these end up with the shares and are the only ones that don't make a profit unless they can find a bigger fool to sell to.

The mining securities eco-system is driven by the fact that groups 1-3 don't need mining to be profitable for them to profit and so supply isn't  constrained by any logical limit relating to profitability.  Group 4 vaguely realise this but are too lazy/ignorant to do some math and notice that it applies to the securities THEY buy, not just the ones everyone else buys.  And group 4 being so numerous is the main reason why mining is unlikely ever to be very profitable for long periods of time - as they provide (and will continue to provide) demand for mining capacity even when it's irrational at the prices at which it's available.

No argument there, but you're arguing my side: the X now will always be smaller than the X later. What this all works out to, simply put, is that no matter what Asicminer won't make more than what mining makes, and "selling rigs" isn't either a way out or in any sense a new market. For all practical purposes "selling rigs" and "mining" are the same revenue stream, and each counts towards the same max.

That would be true if they had unlimited capital and/or all BTC were immediately mined (and they also had the ability to deploy unlimited mining gear).  But as this is the real world neither of those things is true. 

Sometimes X BTC now is better than X*Y BTC in the future (Y being >1).  Which is why it can make sense to sell mining rigs for less than what they'll mine - not that there's much sign of them actually doing that.

Total BTC mining is protocol limited as in you can not currently mine more then 25 coins per block.  Let's set aside the fact that if majority of miners decided to change that tomorrow they could.  So yes currently mining is limited but selling mining rigs can be unlimited as long as ...  Fit whatever multitude of reasons exist in the real world.  Exchange rates, interest rates, more adoption and acceptance of longer time period of return, stupidity, etc... etc...  Heck in the year 2139 if bitcoin is still around I bet mining gear could still be sold to a camp who would try to keep getting a block coin reward and fork the chain and to an opposite camp who wants it to not fork.  In any case all I meant to say was that ASICminer holds way more information regarding the sale such as how much TH they manufactured, how much they currently have, how many pre-orders the resellers want and at what price levels etc... etc... so it wouldn't surprise me if they come out on top of any sale and likely do so by a much larger margin then you think.

This shit keeps getting brought up as if somehow mining is limited but mining rigs are an unlimited market. It's been pointed out (by me, long ago) that it doesn't work out that way. Specifically, any piece of hardware they sell either makes back its BTC cost or doesn't. If it does make back its BTC cost then they would have actually been better served by not selling it, as they'd have mined the difference with it. If it doesn't make back its BTC cost they've practically scammered some dumb fuck wanna-be miner just like yourself.

Some of that will happen, for sure, thus they will probably make more selling rigs than mining. Nevertheless, it won't be A LOT more. It'll be a little more.

Because they sell hardware they are uniquely positioned to sell for more BTC then possible to mine with said sold hardware as already witnessed by the USB sales and with multiple massive fails of both BFL and Avalon it only makes them look better.  Having said that at current price point YMMV.

Seems overvalued to me.  At 3.8Btc/share their current market cap is about 1.52 million bitcoins. That's more then the 1.2 million or so bitcoins that will be generated a year when the diff starts to go up.

That gives them a p/e ratio of about 6.  That's how many years it would take for ASICMiner to earn their entire market cap (or earn as much per share as the current share price)

That means ASICminer essentially has a p/e ratio about more then half apple's.  (11 something right now).

The problem, though is that A) the block reward is going to drop in less then six years, and drop again after that, it would basically be impossible for them to ever earn their share price in BTC, unless they try to take more then 20% of the network.

Now, while it's true that the price of bitcoin could go up, that doesn't justify the valuation, because the share price is already in bitcoin. BTC going up or down should mean the price stays the same.

On the other hand, there are chip sale profits as well.  ASICMiner is probably the best positioned to move to a higher density chip design which they'll be able to sell.

Well, it's not my list, it's MP's. It seems everyone on the same page in question went on the list.


Asicminer/Activemining: Grand Central/Great Central. Geddit? Reobek?

While a good amount of the blog post is interesting, why did you put dexX7 on your list? From what I've read of his posts, here and on reddit, he seems to be a source of a good amount of posts that tackle some of the underlying problems that some issuers don't realize they've created.

Also, Grand.

He's not a competitor, he's just a random scammer. If some guy puts up a poster all over his house reading Great Central Station he's not a competitor to New York's train system, he's just a funny idiot.

Nice how his post count dropped after being called out, by the way. Who knew 2k+ posts are as easy to shed as to make.

Hmm, Discussion started by a "potential" competitor.........

ugh... i hate it when old threads come out new looking - oops !

Thanks for pointing that out, I"ve had a few beers tonight and didn't even look. :p

I'd say he has scaled back... his last post was over a month ago. :-)

As a shareholder of both ASIC miner and Labcoin.. I agree. :p

interesting discussion.

swede- given the fact that you are the public face of a competitor and given your mild discussion so far I would recommend you scale back on this thread. competitors discussing each others valuations is bad form

If anything you should wonder if the passthroughs are really passthroughs?  Do they really have any actual shares backing up the supposed passthrough?  That's a more likely area to pump and dump.  Direct shares are much harder to manipulate since there are verifiable dividends posted on the blockchain and willing buyers at certain levels looking to accumulate.

Oh I don't think that ASICMINER is by any means a bad investment even at current prices. I am just speculating in the possibility (due to low availability of actual listed shares vs. shares owned outside of exchange registration) that the stock price could be fairly easily manipulated.

I do think that quite a few large shareholders have sold shares over the forum rather then over exchanges though. I have seen several sellers offering between 900 and 3k shares outside of open trade on BTCT.CO for example.

The math doesn't work, markets aren't as easy to control as you think, particularly if you are selling low and buying high.

If anything. you should consider the fact that board members are refusing to auction their shares, even at these prices, as a sign of confidence.

Actually there is room for error. At least for me. I'll gladly accept 15% APR, and they are easily knocking 30% APR out of the park. Before TF plugs it, I'm not down for coinlenders at this time.

You're right that we are closing the gap on the error though, at which point we should see more stability and day trading swings.

Upcoming dividend may be 0.04, and if it us, plus their 800-1000TH plan, if that leads to 30%+ network share, that would give us new room for error

Fingers crossed.

If we don't see that dividend, or a good one next week, and we go beyond around 7 BTC, then we are entering bubble mode that will likely crash. If *nothing* changed, just a 0.02 dividend, no good news, no additional network share, I would absolutely sell around 8 BTC as it stands. I'd peg that as the top of a bubble. I'm comfortable at 5 BTC.

I agree. I am just hypothesizing that ASICMINER currently is in the 'Bubble phase' and that people are buying based on the 'It goes up ever day' trend rather then the underlying value. At current valuation there is basically no room for error even if AM manages to deliver on their lofty hash-speed rollout plans.

Could happen, but until the general public has a better option than 25% APR (or what it's at) then it's not going to crash hard, and will likely stay the same or go up. That better option will likely come in the form of a competitor, but none are reliable at the moment. If BFL, Avalon, Bitfury could actually ship large quantities....

You've got some possible startups like cryptotrade but they're sketchier. You've got 30% at coinlenders and you've got to trust that more than friedcat + AM, and give up the exciting gamble of AM.

Anyway, right now normal people are just chasing asks. There isn't much going on, so there's not much we can do to pump other than what you see, facts, announcements, and often speculation.

I just wanted to start an open discussion on the topic of Asicminer. I will lead off by saying that I am NOT trying to bash the company itself, it's intentions or the viability. All I am wondering is:

Since such a HUGE amount of ASICMINER shares are held outside of listed shares, by individuals that have made (and continue to make) literally MILLIONS of dollars on the ever rising value of traded shares. What are the chances that some of these individuals are using funds from privately sold ASICMINER direct shares to inflate the value of the traded instrument, allowing for a higher sale price of their direct shares and completing the cycle of a very long and profitable pump?

I sure as hell would see literally a MILLION reasons to do this if I owned say 2-3 board seats (5k direct shares) worth 2 million USD+ at current price.

Discuss!