Topic: P/B ratio, or how to not get raped in the Bitcoin securities markets - page 3. (Read 6426 times)
June 24, 2013, 01:14:09 AM
To the OP. Don't let the PMB operators get you down. I read this thread and you opened my eyes. Plenty of other's eyes as well I'm sure. Keep up the good work. The fewer newbies to bitcoin who buy these junk bonds, the better
June 24, 2013, 01:03:51 AM
I did not call you a scammer.
I said issuing mining bonds is an inherently dishonorable practice.
I said issuing mining bonds is an inherently dishonorable practice.
Well, I distinctly recall you mentioned my asset specifically. In fact, I seem to recall you saying
You are trying to rip people off 50% less than Ken from AMC. I'll give you that.
So I'm ripping people off, but that's not scamming. Is that correct?
Which it is because it is not possible to offer bonds at a fair price. And 20x the price of hardware that will ship when yours arrives is a very bad price.
Ah, but AMs pricing (and yours) of 30x is OK? Isn't that a bit hipocritical? When AM does it far worse, it is fine because it builds your share value but when I do it, it's a very bad price? You just used 30x yourself as a reasonable pricing for the P/B rate yourself. Are you now backing down from that?
As for the rest, you misunderstand. I don't need to prove anything to you. I'm not trying to raise money.
Well, since we've dispensed with the need to prove our statements, I read that you're having intimate relations with sheep. It is now equally true to your valuation based on $2million of value just appearing out of nowhere.
.b
June 24, 2013, 12:45:05 AM
The 200 TH/s is paid for. I priced it at the same value I used for your hardware in the calculations.
Is it? I haven't heard that from friedcat. Want to provide a link?
.b
https://bitcointalksearch.org/topic/asicminer-entering-the-future-of-asic-mining-by-inventing-it-99497
Go back a few months to where here ordered the wafers and you will see he held back coins to pay for them.
So do tell: how much did you pay for the hardware you purchased?
Thanks for bumping the thread.
Actually, I think you've misunderstood how it works. You made the claim and need to back it up. Saying I should find it myself isn't the way to prove your statements are true.
You see, from what I remember, he held back funds for the additional 50TH after the first test batch of 12 TH. I remember because it was one of the first updates after I bought AM. It was something around 700BTC or roughly $70K, nowhere near the $2M he needs to pay for 200TH assuming the price of $10K per TH.
To answer your question, I pay more than AM and charge less. Am I still a scammer?
.b
June 24, 2013, 12:31:07 AM
The 200 TH/s is paid for. I priced it at the same value I used for your hardware in the calculations.
Is it? I haven't heard that from friedcat. Want to provide a link?
.b
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June 23, 2013, 10:45:06 PM
Pretty much pointless to continue this discussion. Everyone has already made their mind based on their way of looking into things and what they value most.
One problem with trying to value companies in this way (P/B) is that it is so hard to figure out what the book value is. This should be pretty straightforward check of previous company statements, but it seems to be hard for some of the companies around here to actually say what their assets are.
June 23, 2013, 10:28:36 PM
Pretty much pointless to continue this discussion. Everyone has already made their mind based on their way of looking into things and what they value most.
Entropy, I hope you took my comments to you lighthearted, I meant to spike, not to offend.
Entropy, I hope you took my comments to you lighthearted, I meant to spike, not to offend.
June 23, 2013, 10:09:23 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
I agree with your spades metaphor. However, he is valuing AMC against assets that are selling a fixed amount of spades, at a fixed price, so they have a static book value.
As AMC is buying more spades with any shares sold+dividends (income), its book value is constantly increasing, as the maximum share number is already fixed.
Book value is today. Future profits that are retained for reinvestment are in the future.
A mining asset that reinvests is a good concept. AT THE RIGHT PRICE.
And only if it reinvests so that the profit from that reinvestment gos to the company investing - rather than to a different one not owned by investors.
This is a very good point. One look at the corporate structure of V/AMC would be enough for any rational investor to refuse to touch it with a 10 foot pole.
I especially like how AMC has been 'incorporated' in a different country every time I look.
Yes - I lost all interest in AMC once it became apparent it only existed to finance VML, with a few crumbs of mining income thrown investors' way. That plus the one-sided contract where there's no penalty for late delivery and if AMC cancel, VML can repay the cash paid with whatever spare parts it has lieing around. In something time-critical (which mining is) a contract without a penalty clause for late delivery is useless - as the purchaser takes on all the risk and costs of full/partial failure by the supplier.
June 23, 2013, 10:04:52 PM
You can't include future projected profits into a book value (much as some idiots here would like to). Book value isn't the only way to value things (and I'd say it isn't a good way at all for PMBs) but if you're going to use it at all then you can only look at the current value of things. Which is either what you paid for them (less depreciation) or what they could be sold for.
This is why book value is a blinded valuation for any of this. Zero forecast. The credits for its use are definitely for the Economics Nobel on this tread, not me. I'm just AMC's useful idiot, remember?
June 23, 2013, 10:04:17 PM
Book value is today. Future profits that are retained for reinvestment are in the future.
BTW, why would reinvestment from the company matter? If investors want, they can use returns to buy additional shares. When the mining business model doesn't change, it won't matter whether the company invests 10% more in mining or the investor buys 10% more shares. In theory that's why mining shares CAN be compared to PMBs (for value). It breaks down in practice because until recently the price of PMBs wasn't falling in line with their value - making reinvestment in them far worse value than internal reinvestment.
Internal reinvestment works better for companies than relying on new share sales because they can predict cash-flow better and so plan further ahead.
In practice it works WORSE for investors as they have no way to stop it when they realise that it's losses being compounded not profits - which is the case for the vast majority of crypto 'businesses'. The issuer gets to keep reinvesting and taking a cut out of it even when it's obvious investors are losing - with no way for investors to pull the plug or stop the waste (they can only try to find a bigger idiot to pass them on to).
June 23, 2013, 09:59:52 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
I agree with your spades metaphor. However, he is valuing AMC against assets that are selling a fixed amount of spades, at a fixed price, so they have a static book value.
As AMC is buying more spades with any shares sold+dividends (income), its book value is constantly increasing, as the maximum share number is already fixed.
Book value is today. Future profits that are retained for reinvestment are in the future.
A mining asset that reinvests is a good concept. AT THE RIGHT PRICE.
And only if it reinvests so that the profit from that reinvestment gos to the company investing - rather than to a different one not owned by investors.
This is a very good point. One look at the corporate structure of V/AMC would be enough for any rational investor to refuse to touch it with a 10 foot pole.
I especially like how AMC has been 'incorporated' in a different country every time I look.
June 23, 2013, 09:57:47 PM
Book value is today. Future profits that are retained for reinvestment are in the future.
So the ordered, not-paid-for 200THs from AM shouldn't be included in the P/E of 3 you mention, right?
BTW, why would reinvestment from the company matter? If investors want, they can use returns to buy additional shares. When the mining business model doesn't change, it won't matter whether the company invests 10% more in mining or the investor buys 10% more shares.
.b
Hint: There is an answer in there for you, one that will help you in your cause. See if you can find it.
June 23, 2013, 09:57:09 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
I agree with your spades metaphor. However, he is valuing AMC against assets that are selling a fixed amount of spades, at a fixed price, so they have a static book value.
As AMC is buying more spades with any shares sold+dividends (income), its book value is constantly increasing, as the maximum share number is already fixed.
Book value is today. Future profits that are retained for reinvestment are in the future.
A mining asset that reinvests is a good concept. AT THE RIGHT PRICE.
And only if it reinvests so that the profit from that reinvestment gos to the company investing - rather than to a different one not owned by investors.
June 23, 2013, 09:55:51 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
I agree with your spades metaphor. However, he is valuing AMC against assets that are selling a fixed amount of spades, at a fixed price, so they have a static book value.
As AMC is buying more spades with any shares sold+dividends (income), its book value is constantly increasing, as the maximum share number is already fixed.
You can't include future projected profits into a book value (much as some idiots here would like to). Book value isn't the only way to value things (and I'd say it isn't a good way at all for PMBs) but if you're going to use it at all then you can only look at the current value of things. Which is either what you paid for them (less depreciation) or what they could be sold for.
June 23, 2013, 09:53:10 PM
Book value is today. Future profits that are retained for reinvestment are in the future.
A mining asset that reinvests is a good concept. AT THE RIGHT PRICE.
A mining asset that reinvests is a good concept. AT THE RIGHT PRICE.
Great. You should start updating them daily then, from now on.
June 23, 2013, 09:46:25 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
You are correct. Any cash assets that are owned by AMC should be included in the book value. But I don't see any clear accounting that shows such cash on hand. SDICE shareholders found themselves out 6100 BTC when Erik decided that dice funds were actually his. I don't see any documentation that would prevent the same gambit from Ken.
In any event it would be immaterial. Changing the P/B from 35 to 32 isn't going to make AMC a good investment.
June 23, 2013, 09:44:39 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
I agree with your spades metaphor. However, he is valuing AMC against assets that are selling a fixed amount of spades, at a fixed price, so they have a static book value.
As AMC is buying more spades with any shares sold+dividends (income), its book value is constantly increasing, as the maximum share number is already fixed.
June 23, 2013, 09:36:32 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Technically, PMBs also dig for you, if you want the analogy correct :-) However, you're right that this usually costs you more than if you bought the spade and dug yourself.
.b
I was talking about the outcome - the analogy isn't correct in terms of where the spade physically resides and who does the digging. Lease would probably have been a better term than rent - the buyers don't own the spades but DO get all that it produces.
EDIT: And yes - it HAS to be more than the cost of buying a spade or there'd be no point anyone selling a PMB. The issue isn't the "more" it's the "LOTS".
June 23, 2013, 09:34:51 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Technically, PMBs also dig for you, if you want the analogy correct :-) However, you're right that this usually costs you more than if you bought the spade and dug yourself.
.b
June 23, 2013, 09:32:56 PM
OK, so my acquisition cost is aroud $10000/THs. I sell it at $500000/THs. My P/B is thus 50 right?
If you are selling something for 50 times the value of the underlying assets, you have a price to book of 50. Did the hashpower you have on order cost you 2% of your proposed bond price?
Oh, sorry, my bad, I got the numbers wrong; those were the numbers for AM and their sales of Erupter blades.
.b
June 23, 2013, 09:31:04 PM
The money's always in selling spades not in digging. That's why ASICMINER is so much better than most - as they do both.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
PMBs rent you a spade - usually at a price that's a LOT more than actually buying a spade yourself.
Mining shares use YOUR (investors) money to buy spades, dig with them and keep some of whatever's produced by digging themselves. Even when the spade never digs enough to cover its cost.
AMC uses YOUR money so another company owned by Ken can make profit from building and selling spades. You get some spades yourself in return, but have to pay for your them in advance to him even though by the time the spades arrive you could probably buy them elsewhere cheaper. There's no guarantee the spades will ever be delivered - and no penalty in the contract if they're late.
I think Entropy's P/B valuation is unfair on AMC - as it should also include whatever cash AMC has. But Ken pretending his personal shares don't count as they aren't shown as issued on Bitfunder is hilarious.
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