Topic: Re: [LTC-GLOBAL] - ART - building a open art studio [week 32] - page 4. (Read 15481 times)

Perhaps the correct approach would be to hedge all investments in fiat-exposed businesses (*) with corresponding options/futures. So if you buy 100 BTC worth of shares in a dollar company you also sell 100 BTC worth of puts at a correctly chosen strike to offset your currency risk.

(*) Not meaning to imply that this trainwreck is a business by any means.

I don't disagree with any of that - but none of it alters the fact that investors would have been better off (whether measured in LTC OR fiat) had they just kept the LTC rather than bought your shares (of course there's a decent chance LTC will fall back down fast - in which case that will no longer be the case).  And that's what makes a lot of potential investors (myself included) wary of all businesses with signficant fiat assets (less so up to now for LTC investment than BTC - as LTC had previously tended to be pretty stable vs USD).

I agree but we still live on a planet, where fiat's rule and our dear LTC, BTC etc are all just tokens for moving fiat from point A to B Nothing wrong with that.
Lets say I was "LTC & BTC only" business. Do I pay myself a fixed number of LTC per month as people usually get in fiat?
If you paid me 200 LTC about a month ago for a service X, same service will cost you only about 100 LTC this month... because fiat sets the prices for good and services no matter how we look at it. People still get the same pay chek at fixed amount in fiat and not in LTC.

Yes, EUR etc have weakened against LTC and BTC massively. In the real world, equipment still cost the same in EUR as it did a month or 3 ago.
Do you remember those guys who bought large number of (still!) nonexistent ASIC's for BTC? Ouch... 
The reserves we have, opened up a new possibilities we did not have before. I can buy more equipment or expand the business if there is demand and opportunity, without the need to increase the number of floated shares. You can say ART went long on crypto coin and has made a nice fat (unrealized) gain if converted to EUR or equipment and tools.

Well we know that the fiat part of assets have more than halved in LTC value and the BTC part have about halved.  So it's reasonable to guess currently value of assets/shares is around 3.5-4.5 LTC.

Of course their value in fiat has increased (and their value in BTC decreased by not by so much).  But rather obvously the value of shares in LTC has dropped - as income/share will have dropped as well (assuming prices are set in fiat) as well as assets/share.

That's one of biggest issues with ALL businesses that have fiat-valued assets and income : if crypto rises then the value of shares falls faster than profit can make up for.

So how much of the original IPO proceeds is still in LTC?

Someone went kinda crazy last night in litecoinglobal.com and dumped all sorts of stuff, including ART.
I guess it was not apparent from the statements, that we are still holding a nice amount of BTC and LTC.
I know I know, this it *coin blaa blaa blaa make believe world but the harsh reality is, we all are still operating in the fiat based world. My point is - fiat sets prices and *coins do not Let me clarify this by a question.

If Co operates in fiat wold (like we all actually do) where all the prices, even if presented in *coin, are are actually calculated form fiat, what is the correct currency to use for reporting. Is it fiat or *coin or both?
I have reported everything in LTC (we operate in EUR) and plan to keep doing so. Maybe I need to add fiat reports too?

BTW, I managed to get the gnucash use LTC, BTC and PPC using this method: https://bitcointalksearch.org/topic/m.1492068 I am going to use those in parallel for a month or so and then decide.

Week 10 update is - moving day.
I am going to move the kiln and wheel to a new location and finally get those two to work for us.

No I sit on top of that. I just placed another order, I'm on the bid and left my previous order up.

I'm glad to see that your share price is increasing because of the exchange rate. I guess I was wrong about you losing money. But right that it was time to buy I hope I can pick up some cheap shares here!

If this statement has becomes unreadable in your e-mail client, please see https://bitcointalksearch.org/topic/re-ltc-global-art-building-a-open-art-studio-week-32-130947
or
http://forum.litecoin.net/index.php/topic,980.0.html



February statement.

One of the most expensive piece of equipment arrived and on time.
Room for the kiln was not ready as expected so there is no income generated for the February.

While waiting for the workshop rental agreement etc, I decided to go to local business incubator and test out my business model and the idea. I had to apply for the admission by presenting my open art studio idea. Guess what, I passed and I in. This is going to open some really interesting doors for the ART project.

Bad news is, our kiln has to spend few more dais in the warehouse before I can move it to our new studio.

Here are the financial reports:
(see comments at the end of the report)


(1) There is no depreciation for unused equipment
(2) Pottery wheel
(3) Income generated from buying back ART share below IPO price. This will be distributed as dividends for February.

Is that you at 970 shares? Cool

Go right ahead. Also make sure you tell them the guy sitting on your bid is me. I'm your biggest fan, EB, but reality is reality and your stock is losing money.

Where are February's financials? :0)

Well, it's difficult to peg an exact number of how much money he lost so far, but $10,000 is probably an upper limit considering deprecation on the kiln that hasn't been baked into the cake yet, and stuff like office supplies which will be coming out of the company kitty every month from now on (and, keep in mind, there are no profits because there is no equipment the equipment only recently arrived). Also keep in mind, that once he spends money on stuff like a kiln it disappears; if the company fails he will not be able to sell the equipment for anything near what he paid for it (if at all). He has to turn a profit, and reliably. This company will not be valued at it's assets. It will be valued at a multiple of earnings because the assets have little to no intrinsic value. I suspect this is why the bid is around .5 -- they might be lucky to get 50% on used kilns, etc. were the business to fail and they are forced to liquidate.

How much did he lose so far? Difficult to say; he IPO'd 105,000 shares, at 1 LTC/share, and 0.005/LTC/BTC and $25/BTC that's $13,000. So let's take a look at the liquidation value:

1. BTC rose to $35,
2. but LTC fell to 0.0022,
3. so at 0.5 LTC/share, if you denominate things in US dollars, ART lost very close to $9,000 in real terms.

Actually I can't remember the BTC price he IPO'd at. If it was $20, then he only lost $6,000. But it's some huge number like that. His share price is already down to 0.85 best-case; he's going to have to sell a lot of mugs to make up for the loss.

If we try and be nice and say 0.0025/LTC/BTC and 0.85 share price, then ART lost 30% ($4,000). You have to denominate it in USD, or other fiat, because they're buying real world stuff to work with. They don't hold assets in LTC or BTC. So this is pretty much a fact. I think the main reason is because the equipment was late and investors are probably starting to realize that EskimoBob has changed his story a couple of times away from his "four artist friends" towards "I can't wait to set up the kiln and find customers", etc. So this is probably a buying opportunity if there ever was one. Now is the time to pick up cheap shares of ART. If you like EskimoBob's security you can get in now at a deep discount while other investors panic.

I'm hoping his kiln arrives soon. He can probably pull himself out of this hole if he sells enough mugs. Please note I may be wrong; EskimoBob is due to release his February Financial report any day now, and we will be able to see how his company has been doing then.

Umm, are you really saying that? 

I'm more interested to know how EskimoBob managed to lose almost 300 bitcoins of his investor's money. The largest bid under .851 is now .5 litecoins, and this is despite the price of litecoins being half what it was when he started. There aren't even 2000 shares on the bid. There is zero buying interest in ART.

When you look at those figures in US dollars, it's even worse; EskimoBob lost over $10k of his investor's money. Weird.

Getting back to the irrelevant point at hand, when's your hardware getting delivered exactly, Josh?

Oh look, the village idiot MPOE-PRBS is still trolling the forums!
Lets not forget you are paid troll. Every post you make in this forum, is pure spam.

Oh look, Bob lives! BFL's next rep!

Promoting litecoin and bitcoin as a value transfer system is on my list.

For people who might be interested in renting kiln time with cryptocoins, where roughly might this studio be located?