Topic: TU.SILVER - What are the shares worth? - page 2. (Read 3078 times)

Any ideas what happened to BMF's:
3 BF Singles 832 MH/s
2 BitForce Jalapenos 3.5 GH/s
1 BitForce 'SC' Single 40 GH/s

Have those assets become a part of this new shiny SILVER'i adventure of his?

Deprived's approach is reasonable when considering the disappearing posts in the official thread and how hard it has been to get a straight answer.  Most of the deflection lately has been toward you and DeaDTerra, so it's good to have you involved.

Removed all jjdub7's recent posts as he's clearly a supporter of usagi and didn't address the questions in the topic.  There's a seperate thread run by usagi for posts that believe he's doing a great job.  I've left the earlier posts as they had some merit.

If nothing else I hope this thread shows how stupid it is to allow asset issuers to run self-moderated threads where they can delete questioning posts - forcing seperate threads to raise the questions in.

I see you're a new-ish member here.  These allegations against TU.SILVER were made and described at length in the now-locked old Silver thread.

For endless discussion of Usagi's previous businesses, see this thread and this thread.  Another independent forum member just like you wanted to get to the bottom of the whole mess and did his own investigation in this thread as well.  That last thread is concisely written and well-organized and has responses from both Usagi and the accusers.  It's a good place to start.

Really the silver should be seperated from the rest of it - which it seems usagi is finally accepting.

Here's what I said over a month ago (after the first report was poduced for it).  I can't quote direct as it's in a usagi thread - so obviously locked.


Link to original post : https://bitcointalksearch.org/topic/m.1627088

Seems like usagi is finally realising I was right.

Well I'm glad to here the two parts are being split up.

I did, after all, say precisely that ages ago when it became apparent to me that was the underlieing problem with the security - that it was neither one thing or the other.

In fairness the problem arose because usagi wanted to avoid a problem with some other silver securities - that the quantity of silver per share would tend to fall over time due to management fees and/or costs of storage etc.  The problem for any PM fund manager is how to generate revenue from people who just buy and hold the silver, generating no income but still requiring maintenance.  The solution chosen was, however, in my view about the worst of both worlds.

To avoid paying for shipping, investors have to instead pay for the capital needed to generate income to pay for shipping.  So to avoid paying for a $2.50 stamp they have to instead buy $50 worth of shares in the post office.  Similarly for storage.  The cure is worse than the problem it attempted to address.

This was all perfectly obvious from the start of course - but not to usagi.  Similarly with his ill-conceived plan to sell CALL options on the silver - which could never work properly when you have to write options vs shares and the shares don't just represent silver (plus you can't write CALLs on the silver actually backing shares without issuing new shares to write options on which they breaks the contract's obligation to hold 1/10th oz of silver per share).

What you aren't aware of in terms of history is that usagi still has half a dozen securities open that have failed/gone bust/are in an extended period of close-down.  You're also unaware of some of his past rather shabby behaviour - such as clearly abusing his position of trust in one company (BMF) to the advantage of another (CPA).  Then denyiing there was any conflict of interest and giving conflicting accounts of the reason why the dubious decision was made.  Eventually he DID admit there was a conflict of interest - but not until AFTER he'd made a scam accusation against me that I was attempting to somehow cause him harm by lieing : one example of the supposed lies being my claim that there was a conflict of interest.

Taken individually his posts tend to seem sensible, straight-forward etc.  The problem comes when you start comparing what he says now about something to what he claimed/promised in the past.  Then you inevitably find that he's not actually doing what he said he would do.  As happened here - where the claim was he was running a silver fund yet it soon turned into something rather different.

As for moving forward with the fund, before looking at detail of what to do with current assets the first stage is to decide what the purpose is.  Is it :

a)  A silver shop
b)  A means for investors to own silver without having to physically possess it
c)  An investment fund which mainly holds PMs.
d)  An investment fund that happens to hold a bit of silver.

There's a distinct difference between the requirements of a) and b) - and it's pretty hard to do BOTH well in one vehicle.

Usagi's original plan COULD have been done decently - but it would have needed two (or even three - there's an argument for a security that is purely used for option execution) securities not one.  But I'm not sure just how keen any exchange would be to list an investment fund run by usagi until he's closed down the 4-5 (depending if you count CPA or not) investment-holding securities or so he currently still has open but largely neglected.

Or really, additional shares should be sold at auction.

Deprived:

1 - None of this matters because usagi is not legally bound by any financial laws.
2 - If usagi releases more shares, the price should be determined by an indicator such as the 90-day weighted moving average.
3 - As usagi functions as our "board of directors", its up to him to decide whether to reinvest the 30 BTC or distribute it to the shareholders.

It seems like he's addressed the accounting errors in the main asset thread.  As for the pricing of additional shares, they should be sold at a premium to maintain the price integrity of the existing shares.

Edit:  While usagi is not bound by financial or regulatory law, he holds a significant stake (around 25%) in the company's "equity" (technically rights to profit-shares, as TU.Silver is not a business entity and shares "do not represent real world holdings" etc etc).  Therefore it's in his best interests to make the best decisions regarding the reinvestment of funds, and I trust this will remain the case.

Since usagi seems comfortable with me answering these types of questions:

There are indeed currently two separate and identifiable asset bases for the fund, a silver-based one and an "other". I have just completed a quantification for a clean split of the two as of March 31st and will, by the 1st or 2nd, have done the same for April 30th. At that point I will provide Usagi with the compiled comparative financial statements (and hopefully to the public) and with that information in hand I leave it up to him how to proceed. I foresee three possible courses of action although the ultimate decisions is up to Usagi and other shareholders:

1) All assets in the "other" are disposed of and a dividend for their value is paid out. The NAV would therefore mimic strictly the silver holdings

2) Some assets in the "other" are kept while the rest is disposed. The value of the "some" is what is predicted to be needed to finance (through interest and other income) the ongoing fees for the fund so that there is no NAV degradation which would occur in the event of a pure silver fund due to management and transaction costs.

3) No "other" assets are disposed and the stock remains a hybrid of about 50% silver and 50% other.


Deprived, I respect your analysis and position both in this case and in other threads where I have seen you. You have a good grasp of things. However, you are being needlessly combative towards Usagi. I don't pretend to know what the backstory is between you to, but this does not seem to be the place to play it out. Sorry if I come across as somewhat rude.

The book value does matter as :

1.  It's presumably what you'd get if the shares were liquidated.
2.  It's the only measure you have to determine what the likely income from investments etc will be.  If usagi has 30 BTC more cash to invest then obviously that should raise expected income.
3.  The most important reason to know it is to know what price the fund would be selling shares at now - so as to know whether to buy from others or wait.  According to the contract shares are sold at the spot price of silver plus a small markup.  That part of the contract was being ignored (unless 200%+ is a 'small markup') - but it seemed usagi was trying to correct that.
4.  At what price could you rely on the fund buying back your shares if the other bids vanished?

The fundamental issue behind it all is that usagi wants to run an investment fund but pretend it's a silver shop.  That leads to shares being sold at a price that isn't consistent with selling silver (for the sort of markups being charged I could go buy physical silver with cash with zero delivery time, counter-party risk or fees) but without any published valuation consistent with an investment fund.  So it ends up being neither.

It's all fine and well saying 'investors can pay a share to see what their shares are worth' - but how is that of use to someone who isn't an investor and wants to invest or trade the shares?

So you tell me if you have a clue what usagi is doing:

1.  What price would usagi be selling shares at now if the fund had some spare to sell?
2.  What does each share actually own?
3.  If the answer to 2. is just "1/10th oz of silver" then do the shares have any rights at all to income from cash they don't own? (i.e. the majority of the cash raised from the sales of shares this week).

If usagi's plan is to personally keep all cash raised from sale of shares but give out dividends based on what they raise (but with NO obligation to do so) then he should come clean and say so.  Until then it just remains YOUR guess that's what he's doing - in previous reports it was clear the investment capital belonged to the share-holders.  You seem to say he now personally owns it (by saying the shareholders don't).  That's scary - as he's not even making an effort to repay all Nyan.A investors (which he personally took respondibility to do - but recently lied and denied making such a statement despite not having deleted it), but now people are supposed to trsut his goodwill without even a promise?

Interesting though your speculation is, it doesn't match what he said before.  Which doesn't mean you're wrong - it would be out of character for his current position to be consistent with his past statements (he's recently lied about a post he made earlier the same day - claiming he didn't say something when he clearly did 2 posts up in the same thread).

I'm also not that interested in speculative defences of usagi's position.  He can either clearly state what is and isn't the case - or not bother if he believes it isn't information anyone is entitled to know.

In terms of the underlying backing asset:

Silver closed trading at $24.72 today, meaning that 1/10th of an oz is valued at $2.472 (~$2.47).  At the current USD/BTC rate of $132/BTC, this leaves us with a spot market value of 0.01872727 BTC per share, which is around 0.05 lower than the current highest bid. 

Investors are obviously willing to pay this premium for the shares based on the recent dividend history rather than invest in TU.Silver as a growth investment.  When it comes to BTC stocks, shareholders hold only the rights to profits, not to assets, although many issuers will make a verbal guarantee of assets if the underlying fund is liquidated.  While there should definitely be a separation of personal and business accounts, it does seem like usagi knows what he's doing.  The TU fund is one of the few that consistently provides investors with newsletters, which can also contribute to the higher price of the asset (investors are willing to pay a higher price for an asset they consider lower risk - see the ZigGap situation for a contrasting reference).

So the "book value" doesn't really matter, just like it doesn't matter in world markets.  That's why there's such a high variation between P/E ratios of competitors in many sectors...investors on both the buy and sell side determine the price, rather than any specific mechanism.

The basic part of the shares should be worth literally 1/10 of an oz of silver, which is trading around $23 right now.  Therefore, what I'll refer to as the "intrinsic" value of the security is defined by this value.  There's also a speculative value associated with the shares, as Usagi pays out revenue derived from other options and securities trading in secondary markets. 

Seeing as Usagi has already paid out over 30BTC in total revenues (and yes, that's more than 30BTC to shareholders other than himself), its obvious that there is in fact revenue, as opposed to this being a pyramid scheme.

So to answer your question, the shares are worth two things: the market price you can fetch for the share itself or the market price you can fetch for the silver reserve backing the share.  The shares are only "worth" what other people will pay for them, remember...

Will wait until usagi has answered the actual questions (which are at the end of my post with the helpful title of "QUESTIONS") rather than ones I didn't ask.  He's posted some related things in his FAQ whilst dodging the actual questions of course.

It appears the claim is now that it was just an error made in the spreadsheet AFTER the last audited reports were published.  Given that was only a a few days ago it seems strange that a post would be made announcing as great news that a mistake had been made and corrected without any actual impact on anything.  Guess it's kind of cool that usagi can forget the fund had 30 BTC cash then get reminded of it by a financial advisor.

It still does leave the question of who the 30 BTC belongs to: any clear answer to that will put the lie to a previous statement by usagi so don't expect a clear answer obviously.

Post by usagi deleted as all it did was refer back to his thread for answers.

This is a self-moderated topic.  The rules being applied are:

Any posts by usagi or friends will be deleted if they are fully or partially off-topic or attempt to weasel around the questions (clearly given at the end of this post) without actually answering them.  This will be done without delay or discussion - what's good for the goose is, after all, good for the gander.  If this happens repeatedly then, in accordance with the forum rules, usagi will be asked not to post further in this thread.  I'd prefer if he just answered the questions but am not expecting that to occur.

This topic exists because when I asked perfectly clear and simple questions in the main thread for TU.SILVER they were not answered and the second post of mine deleted.  If we can't discuss the security in its own thread then we'll make our own.

BACKGROUND

Today usagi made the following post:


The emboldening is mine.

Whilst it's amusing that someone can misplace half of their 'internal value' and not notice it (and the error get past some kind of rubber-stamping audit) that's not the main focus here.  The auditor not blinking at half the value vanishing is excusable - he probably just has past experience of companies run by usagi (so half value vanishing is entirely standard).


SO WHAT'S THE VALUE OF THE SHARES?

Usagi has been lately paying out dividends to reduce the non-silver element of the shares.  The most recent valuation of the shares was only given a few days ago - with a heavy reduction in price caused in part by that policy.

My reading of usagi's post above was that 30 BTC belonging to investors had been found - what else could the 'internal value' refer to after all?  And there were references to "we" further suggesting that the funds were something other than usagi's personal money.

So I posted asking the following (quoted with usagi's reply) which was NOT deleted:


There were two parts to my question:

1.  A request for a new valuation - pretty simple you'd think as one was given only a few days ago.
2.  A question/suggestion that maybe the 30 BTC should be dividended out - if the funds belong to investors then retaining them undos the good work usagi had been doing in getting the price/share back somewhere towards being representative of actual silver prices.

Much to my amazement (and I WAS genuinely amazed) it appears that somehow doubling internal value of shares has a negligible impact on their price.  Maybe I somehow misunderstood things - and the found 30 BTC weren't investors' but belonged to usagi?


SO WHOSE ARE THOSE 30 BTC?

In the interim the price of TU.SILVER shares had risen sharply - my belief is that was because some people, like myself, read usagi's post as meaning the value of shares had doubled.  If internal valuation has doubled then it's not unreasonable to assume external valuation has increased similarly.

So I posted suggesting this should be clarified.  My post was then deleted and I was PMed a non-response to it.  As the PM was in response to a PUBLIC post I'd made (which has now been deleted) I quote my post AND usagi's PMed response here.


As I said, I simply can't confirm or deny anything of the sort for you. If you need a confirmation of what is going on, you will have to ask our financial advisor. Good luck!