Topic: The coming flash crash in AMC - page 9. (Read 29407 times)

It is a bit disappointing, isn't it?  Zero negative votes against the AMC-PT on BTCT -- I would have thought this was an opportunity for BTCT to distinguish itself from the crowd.  Sort of demonstrates how a financial sector, left to its own devices, can't self-regulate effectively when all the individual players, including the exchanges, act in their narrow self-interest.

Somewhere down the line, months or years from now, it will be situations like this that cause government agencies to wave their arms and insist that more regulation is needed over this space.  (Whether enforcement is feasible is a separate question.)

By the way, I blame myself primarily. Perhaps this offering shouldn't have been listed, but in the end, do your own research.

Plenty of terrible / fraudulent stocks have been listed at major exchanges. I won't bother to list them.

Absolutely right. Humans filter out stuff that doesn't agree with their current "world view". Its a horrible fault, and why its good to not take "snap" decisions. At a minimum, sleep on stuff before diving in.

I came across AMC and thought "I want to get in on this before it becomes another AM" and was completely blinkered, bought in at 0.0025 and within 48 hrs sold out again at a loss after realizing what mess the whole thing was.

Lesson learned. "Fools rush in where angels fear to tread". I've put the bitcoins I clawed back into AM

Sure lots of people have something to learn from this episode.

I agree 100%.  This is what I've been trying to tell everyone but they just wouldn't listen.  I had to put them all on ignore.

 

I agree 100%. I hold the exchanges, specifically their owners, responsible. This get rich quick method of opening a "company" and then listing it on an exchange is going to hurt bitcoin investing in the long run.

The first time I read the description of AMC I was extremely disappointed that exchanges would even allow such a concoction to be listed. Shame on the exchanges. The ridiculous business model and rules, especially that AMC and VMC are owned by the same entity, should have been an instant no-go for the exchange. Burnside/Ukyo/whoeverelse, please tell me how you can possibly read the description of AMC and allow such a thing to exist on your exchange.

Exchanges: enjoy your fee's now, because this method of doing business will hurt you in the long run. However, if you gain the reputation as a diligent exchange that does not allow these type of "securities" you will gain the respect and confidence of investors. Please do not use the "investor ignorance is not our fault" copout. Its your responsibility to disallow these types of schemes from being listed in the first place. You are a pseudo accessory by allowing it to be listed.

Cognitive dissidence is a powerful thing and causes people to only listen to the posts/news that supports their desires.   Everyone wants to catch the next AM at the bottom.

Once you realize logic isn't always the primary driving factor, you can predict the moves and make a lot of btc.  I don't think this ride is over.

Its actually a lot worse because kslaughter cuts himself in on the dividends as well.  The whole thing has been amazing to watch.

Well AMC's a bit different.  Here's what happens with the cash.

Shares are sold to the public - and immediately diluted in value by 50% or more due to Ken's personal holdings + the way he deals with unsold shares.

Those then buy miners that mine.

From what Ken just posted, mined income gos into a pot that once it gets to $1 million the cash will be loaned to VMC (wholly owned by Ken).

VMC then makes chips and repays the principal to AMC using 100% of profits.  That means that for the first $1 million of profit AMC doesn't even get its 10% royalty - as the royalties it was due are treated as repayment on capital (rather than repayment coming solely out of VMC's 90%).

So after $1 million of profit AMC has received 0% profit.
After $2 million profit it would have received 5% of profits.
After $4 million if would have increased to 7.5%

But how likely is that much PROFIT will be made on sales of ASICs that only get produced end of this year/beginning of next?  By then demand will largely have been satisfied by existing producers - and sales prices will have been driven down by competiton.  If that chip line never makes $1 million proft then investors bear all 100% loss - Ken only takes the lion's share of profits not losses.

So the best result for investors is that they get, as profit 0-5% of all cash funnelled through VMC - with VMC (Ken) deciding what counts as profit.  Even the mined coins get passed through VMC to make sure Ken gets at least 95% rather than the 50% share distribution would suggest.

So it's an entirely rational decidion for Ken to sell more shares - as he gets at least 95% of any profits from the capital with no risk.  Having decided he's going to skin investors (rather than just fleece them) it's the logical thing to do.  It is, of course, entirely irrational for investors to send him any cash.

Cripes.  Fixed that.  :/

This.  It seems many never really consider what equity is.  Equity is selling off future profits of an enterprise.  If one believes their enterprise is profitable AND they have sufficient funds to ensure that profit what rational reason would there be to sell off more future profit?

Hint: there isn't one.   Companies sell enough equity to meet their capital needs and not a penny more.

Depends on your definition of vetted.  I'd argue that we're one of the harder ones to get listed on at the moment.  Aside from MPEx we certainly have the most documented minimum requirements.  (Check out the Asset Issuers ToS.)

Are there any plans or thoughts so that in the future any companies or other entities which wish to be put on your exchange will be required to be vetted first? Or will it continue to be a wild west sort of situation still?

Since you don't need any more money, you are going to close the IPO, withdraw your ASKs, retire all the unneeded shares, and remove the IPO terms from your company contract right?

Any rational businessman would stop selling equity once his capital needs are filled.

Except if his business was selling shares in a worthless company, that is...

Sometimes I wish I was the only gatekeeper.  It's better though that I am not, I was wrong on so many different things back in the GLBSE days that I when I setup btct.co I knew I needed to get other people involved somehow.  I really hope they're right on this one.

Did you honestly expect anything less?

"He who panics first, panics best."

From Ken's own data above, AMC only has at best, BTC6 000 to support a market cap of BTC200 000.  And that is before you account for his plan to make a no recourse, zero interest loan to himself of BTC10 000.

It's going to be a long painful death for holders of this mess.

Check your thread please, the option is listed on btct.

It has begun

I hope you guys are starting to understand why balance sheets etc are important stuff BEFORE the IPO and also after the IPO.
Only you can put the pressure on issuers and exchanges.

I am a shareholder of AMC and i think the same. I addressed this here just recently.

https://bitcointalksearch.org/topic/m.2606230

What do you guys think? There's a lot of text in the company's contract with the shareholder which is a complete waste.