Topic: The coming flash crash in AMC - page 7. (Read 29407 times)

For IPOs where the issuer needs XXX amount you could apply two simple rules:

1.  The funds raised from sales are escrowed by the site until XXX is raised - or reversed to all shares (and the IPO closed) if XXX isn't raised in Y days/weeks.
2.  Issuer account is locked against transferring shares or selling at below a declared IPO price until 1. is met.

Number 2 is a problem (as happened in the past with Ken) where the issuer gets impatient and starts selling cheap.
Number 1 would only apply where there was a minimum needed to achieve their goals.  If they fail to reach that in a reasonable time period (weeks not months) then the IPO has failed - so just return the cash, delist it and move on.  You have to lock a lot of account functionality to do that - otherwise issuer an just transfer funds to an alt account and reuse it to buy more shares inflating the count of what was actually sold.

I think you're still not clearly understanding the main problem with AMC btw.  The problem is that its structure so that even if it DOES make profit from hardware sales under 5% of it ends up with investors.  How much less than 5% depends on a definition of 'profit' imposed by VMC (which shareholders have no say in or oversight of) - which makes the 'no salary' clause of AMC worthless (as Ken can give whatever he wants as salary to himself/friends/family before profit comes anywhere near AMC) and on how much profit is made.  To get 2.5% return on capital requires $2 million profit on sales to be made - that's sales of ASICs that won't even be out until end of this year/early next by KEN's estimate.

That's a great idea.  Maybe when investors vote they could plug in the number of shares they'd be willing to commit.  Their vote wouldn't be tied to it, but it could be used as a weighing mechanism, and whatever they plug in they would be bound to.  (site would reserve it and auto-execute somehow at ipo.)

Maybe even better would be to allow ALL users to pre-commit on pending assets.  The amounts designated would go in reserve before the IPO, and the shares purchased would be locked after IPO for some specific time frame.  Then IPO's would be limited to some percentage of the pre-commitments.  IE, an IPO would not be allowed to release more than 150% or 200% of the pre-committed share count.

It'd also be a great way to prevent the situations where an issuer needs XXX amount to get started, then only raises 50% of that in the IPO.

Lots to think about.

I do tend to disagree with this.  There are a lot more successes out there than just ASICMINER.  Just none with such fantastic returns.    There are also a good sized subset of issues that are setup to hedge against a cryptocoin drop, such as the gold and silver assets, or the fixed fiat return ones like esecurity.

I agree that there needs to be an IPO plan that gets evaluated as part of each issue.  This IPO makes that fairly obvious.  We'll add to the issuers template some text around this.  It's definitely not going to prevent it 100% of the time though.  I don't think you can prevent failed IPO's entirely.  It's such a guessing game in terms of demand.  I think that's partly why the MPEx tranched IPO worked so well, but you still have to be careful to issue in manageable increments that make sense.

Cheers.

IF they are smart, they will see the mountain of BTC in the distance that comes from building a trustworthy platform, over the mole-hill of BTC that comes out of a few days of trading.  (I hope some are reading this?)

Such a cynical view might be appropriate for a mature and established exchange.  But for a startup trying to establish itself, such an approach would be self defeating.

An exchange exists to provide startup capital to businesses.  If the investors in those businesses are not rewarded with dividends and capital gains appropriate for the risks taken, there will be no new capital available, and the exchange will die.

The history of bitcoin securities is one of lost investor capital, and ASICMINER as the exception that proves the rule.  Until there are numerous examples to contradict that statement, any investor or operator of an exchange is likely to lose all of their capital as well.

That makes the shares essentially a PT issued by Ken connecting the "BTC-TC Virtual Exchange Game" and his real world company.  I'm not sure how else you can connect a real world company based in the US.  I don't think you can buy real, direct, legal shares in one on an exchange outside the US.  You have to connect up the virtual company in the game to the performance of the real company in a way that emulates it's successes and failures.  This is not unlike how EA scales and emulates the stats of the various players and teams in it's annual releases of Madden Football or how many of the NYSE/NASDAQ stock trading games out there emulate the successes and failures of the real underlying companies.

BitFunder may have a different take on things, but BTC-TC does not trade real shares of real US companies.  Period.  This is part of the risk you assume and you agreed to when you registered on BTC-TC.

Cheers.

Mods do not evaluate the profitability of an asset, or at least shouldn't.

Ask yourself, however, why should they _not_ vote in favor of something that will give them lots of money? The listing fee, the trade fee, whether loss or profit; all of that goes straight into the pocket of those voters. Of course they want that money! That's why they bought the LTC-G shares!

.b

Eh, I do not see how it can be accurate to call them separate companies.  I'll post the same info here that I posted in the main AMC thread.

AMC is described as a wholly-owned subsidiary of VMC in the listing that they themselves prepared for both both Bitfunder and BTCT. 

From the "Details" tab on BTCT for the passthrough shares:


And from the "Private Placement Memorandum" on Bitfunder (https://bitfunder.com/asset/AMC#pane_profile, which is only presented as a jpg, so I have to retype the content):

PPM, page 2: "AMC is a business unit of VMC"
PPM, page 6: "Shares of AMC on Bitfunder do not represent real world shares of the company.  The shares are solely a distribution mechanism for rights to profits."

To me it is definitely important to maintain the integrity of the exchange.  If you look through the AMC thread, (if it hasn't been self-moderated out?) you'll see that myself and many of those involved with BTC-TC have been asking questions and pointing out problems.  We tend to get drowned out in the excitement, and as you can see by how quickly the asset was approved, it's obvious to me that at least some of the (there are 20+ now) mods were also excited.

I'm not sure yet how this will ultimately pan out.  Ken seems to be putting in the man hours, trying to get things together.  I really don't feel like this is an outright Pirateat40 kind of deal.  Does that mean I think it will succeed?  I'm not sure.  I believe they already hash, I believe they will make a chip, I believe they'll probably even get their unit out the door.  What I'm not sure of is if they can do it before everyone else does, or if they can do it in sufficient volume.

This is undeniably extremely high risk to be investing in.  When I bought my first 100 ASICMINER shares on GLBSE I was almost certain I was going to lose it.  When I bought my first 100 shares of NYAN.B I was almost certain I would not lose it.  So go figure.  Those 100 ASICMINER shares have made up for all my GLBSE losses.


My understanding is that AMC and VMC are two separate companies, with contractual agreements between each other.  This structure is not unlike the ASICMINER arrangement, though I have not picked apart all the details.  (read Deprived's posts on this, they are fairly informative.)

I'm not sure yet this is a complete failure.  What the investors paid 0.0025 per share for has not fundamentally changed, so what they wanted when they paid that they got.  There is no loss unless you sell, at which point you no longer have whatever it is you wanted at 0.0025.  Ken definitely seems to have misjudged the market around the IPO, but SDICE did the same thing, and many other issues have had the same problem.  I think the mods that approved it believe that Ken will do his best to fulfill his contract and the obligations he has laid out.  Unfortunately after that there is no "IPO management" behind the process, so Ken was free to post the shares at whatever he wanted.

What I really don't get is:

  Why did people think 2 days ago that 0.0025 was a great deal?
  And now, two days later, with minimal changes to the underlying issue, think it's not a great deal?
  On an asset that per stated plans, will take months to deliver?

The market really doesn't make any sense to me sometimes and trying to make sense of it really hurts my brain.

If there are changes to be made it's going to require more manpower to help filter better and to help the issuers plan their IPO's better.  I've been discussing getting more people involved lately, I will continue to pursue those avenues.

Cheers.

Well there is an old saying
If you can't beat them
Join them

Sometimes, I wish there were more gatekeepers who bothered to take a look at new assets. But like I've said before, why should they?

"Hey, here's 5BTC, go mad. Oh, and if you have plenty of time, feel free to spend your time reading this elaborate document for no further benefit"

.b

It is painful to see over 50% loss within a few days.
But people got to learn and move on, be wary of any "Asicminer 2.0 scam" in the future.
It is their last chance to sell the shares before they are worth nothing...

Fell for the its on one exchange so I guess it passed some test fallacy myself of course I sold out noticing the spread between the two exchanges was huge.
That said it is possible we will see a dead cat bounce or two but a company should be less speculation more investing
Of course speculation is fine as well with AM but its with good reasons
Speculation on how badly something is flaming out is different

Maybe it will cause some changes to be made but the question is what criteria should be met that AMC had and what else should be added being listed on another exchange has a value getting burned is the fault of the investors unfortunately
So really three choices
Dollar Cost averaging those expensive shares and hoping on a small bounce to cut losses
Cashing out and taking the hard loss
Hold and wait

Lol speaking of Suspicious here is another one but they promise videos not pics so ponders that lols
https://bitcointalksearch.org/topic/m.2573945

Was observing this myself and thinking I still prefer AM but if the news hypes up sentiment then a holding position at a very low price range will result in a nice return of course AM keeps going up so need to stalk it for this news  
That said I don't think this downdrop is done either and by far we will not reach that starting price unless we see shipping or something on a large scale.
Of course the exposing risk to price dropping and lower liquidity make it harder to execute but it is interesting nonetheless
It has only been on btct a few days so the true trading activity will take some time to observe on one exchange and likely explains the significant price difference between the two that or IPO buyers are holding since executing would be a fairly large loss.
As for the exchange listing there are worse out there was thinking well its on bitfunder mentality
Either way as always do your diligence
They are listed as a competitor to AM but as we know competition hasn't been delivering so Do your diligence again
If AM produces weak units but competitors offer better units at lower costs in the future that can undercut AM it's worth checking everything out
Either way I am guessing the market considers the true value at 0.0005 until proven otherwise and would agree no more no less until results appear

It broke.  Now 0.00073 at Bitfunder.

2 weeks to break the 0.0005 price might have been optimistic.  Everything happens faster with Bitcoin!

You are correct that in the long run the security will not be worth it's current price.  Ken has no hope of getting in front of the ball on this project.  Although he does have just enough going for him to pump the price back up to .002 for a short time.  You could buy now at .0008, ride it until .0019 or so and then dump for a quick profit.

At the moment, long money is in AM, short is in AMC.  The trick is when to roll AMC profits into AM shares.

Good luck everyone!

**disclaimer: I'm currently invested in KnC mining rigs and AM shares for long term hedge against USD/BTC exchange.  I have no plans of re-purchasing AMC shares.

I think they an a few others that frequent the AMC thread and the various freenode IRC channels started out as unlucky kids falling for Ken's scams, but as more and more people showed them the scam they transformed into monsters. Now they're soulless husks who truly believe AMC is the second coming, and they think acting like everything is nice and dandy will attract the new money they desperately need to pump their share price up.

Besides, they wouldn't be so obvious if they were part of AMC.