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.

SOON :)

EXPECT

Well, I guess some people will buy these at very inflated prices... (I dare to call everyone stupid who buys any of these for more than a month worth of expected dividends)

More money to be lost to the big fish on GLBSE in case of a pirate default, I guess.

It depends on your view of the world.  If you think (and you obviously do) that it is all going to fall over very quickly, then you will obviously stay away.  (I had someone point out that there was a bet BS&T would default in July - unlikely to be based on anything other than pesimism.)

On the other hand, if you have a slightly more reasoned approach, and probably better informed, then the price someone will be prepared to pay will be higher.

I am undecided as to what constitutes a good price, as I expect the dividends to run quite well for another five months (which is my current guess) and beyond that I am uncertain.  Also, the growth in dividend stream over the short-term will be quite healthy.

(p.s. I'm not that big a fish, and not a fish at all :)   )

StarFISH, and you look a bit chubby on that photo of your's! :D

BTT, the price on this is also a kind of double prediction:
* How high will the dividends be on PPT.X issues in the future and
* When will pirateat40 default

Both are interlinked, as the dividends could rise quickly and pirate might default soon, or dividends might decrease over time but he might keep up his operation for some more months. Still I figure from the recent runs on IPOs on GLBSE some bubbles are already forming - it seems to be more important to some ppl. to own shares at any cost instead of thinking about values before.

Luckily GLBSE is still in terms of "company" size, fees and money movements rather a playground than a stock exchange - I hope it stays that way in the future too! :)

My friend the Crayfish and I will have some chocolate fish (with the pink marshmallow) while hunting Jellyfish.  The weight is hard earned.

Pirate might not default, and I'm expecting that he won't.  If I thought he was, I wouldn't have committed 640 coins to PPT just to pay out bond holders, or be happy to have my account with him sitting with 4000 coins for months on end.

But you are quite right, calculating a fair price will be difficult.

Subbing. Price will be hard to determine but have a price i'm willing to pay

What happens if PPT cease operations because pirate change his policies, reduces ROI so that this venture is no longer profitable. will the 3840BTC (reserve fund) be split between the 9000 PPT.DIV making a final payment of 0.426BTC/PPT.DIV share + last weekly profit?

wonder if you have any views on expected price, and potentially expected payout?

The reserve fund is linked to the PPT shares and as stated in both the OP and FAQ, on the event of a liquidation or winding up, those funds are repaid.  They are not profits.

Unsure about price as that will require each buyer to assess what they think the future dividend stream will be worth.

As for payouts, PPT.D should be about 0.0425 per share and that was for 2500 bonds.  As we move to 3000/wk, that would be 0.051 (scaled up by 3000/2500).  What we have also seen as the PPT offering has become better well known is that the bidding price has also increased (the implied dividend from PPT.A would be 0.032 scaling up by 3000/1500).

These figures are per PPT.DIV share, correct?

This is a significant amount when compared to what PPT.X shares go for; someone holding as many PPT.DIV shares as they buy PPT.X shares per week could view it as them getting a higher payout / cheaper purchase price on their PPT.X shares. It will be extremely interesting to see what price the market decides will be appropriate for these.

Yes. 

So if I get it right it should be 9000 shares backing those 3840 BTC in the fund for PPT.X.
Then it would be approx. 0.427 BTC/share ... if we buy higher we take more risk and you lower your risk while getting profit for the work you did with all this PPT stuff.

The case of Pirate's default is obvious - our money will be lost.
But my question is how the fund will be refilled in case that part of it will be used to cover the difference in case Pirate changes the rates and you'll still have to pay the full 1.28 per bond? I know that in most cases it will just lower the profit from that batch of bonds but if the reduction is significant it can go even to a loss.

Just out of curiosity, what happens if a member of the cartel wants out after selling all of the PPT.DIV they are allowed to sell and subsequently finding their earnings to be too low (even after a fair amount of time)?  I ask because with 85% less new income, I don't know what motivates them to keep backing up the bonds once the upfront bonus income has averaged away (or perhaps before that happens depending on scruples and life situations)?

Is the auction different than trading the bonds on the GLBSE?  I just don't see PPT.E listed..

Ok sorry for my ignorance, kinda new to this.  So can I buy them now? If so where? I don't see an option. 

 :-\

Will PPT.DIV be an issue like the PPT bonds with X number sold on the first day, or will each member of the existing have free rein to do with the 90% of their DIV shares as they see fit?

So is it possible to buy PPT at 110 or 120? I would prefer to buy those if possible?

If you could, you would find there are few benefits.  They provide no dividend, and lock up the coins in the insurance fund.
(They also have terrible liquidity - it is why we did the DIV shares.)

Well there's the benefit of having 250 of the .div shares. I wold be interested in holding on to that and not sell. Just reaping the dividend.

Also it boosts the number of bonds they can issue.

So if u are interested in a partner 7 who is not interested in selling the .div shares, let me know. I will certainly buy in

There have been a few sales of PPT.DIV shares since they have been available to trade, and with the first bond redemption (PPT.A), the first dividend is scheduled for tomorrow at a modest 0.0159.

I cant believe these are selling at 1.4-1.5. That will basically mean the return is 1% a week.

http://en.wikipedia.org/wiki/Greater_fool_theory ;)

Actually, the first dividend that has gone out gives that 1% return for that week.  If you look at the future dividends you will see that they are higher.  By your reasoning the return will be 2% for the next two weeks and then closer to 3% when PPT.D dividends are paid in three weeks time.  Apart from the following week where it will be higher again, with a 1.5BTC price, it looks like 3% to 4% per week return.

Anyone who owns PPT.DIV interested in lending them to me? I will pay you 10% higher dividend than PPT.DIV pays while I am borrowing it from you. Looking for 50 shares, and to borrow for at least 4 weeks.

PM Sent

I have borrowed 50 shares from dollartrader to be returned Sunday 24th of June. I will pay him all dividends + 10%.

I had the idea to try to do a similar thing back when they were selling for 1.5 BTC.

Maybe stupid question but what do you gain with that?

The ability to short sell it and offer those wanting to buy it better prices than they would otherwise get. ;)

Thanks little bit overpriced right now so maybe even a good idea  ;)

What sort of terms would you want for borrowing some shares of PPT.DIV, say 300?

I'm happy to go escrow, and may even borrow some shares myself.

BTW, wouldn't the escrow need to be the one that sells the shares, because from the time you transfer them you need to trust the counterparty. Otherwise they could sell but never deliver the funds to the escrow agent.

TBH putting the funds in escrow would be a pretty large impediment, as it would keep me from using the funds to generate income in order to offset the dividends while the bonds are being borrowed. If we could work out something else to counteract the trust issue, PM me or let me know here. Would dividends to be paid on Tuesday at 2pm UTC work?

Sorry if I missed this, but how do you estimate income (profit) from PPT.x bonds?

I can't get the numbers you have stated in this thread, for example let's take the first issue of PPT.A bond:

Number of bonds issued 1500, total income from this sale 1608.81947502 (average price was 1608.81947502/1500=1.07254631668)

Then estimated profit has to be (1608.81947502-1500)*1.28=139.2889280256, or if you take compounding interest rate for 27 days and 22 hours then profit becomes 184.1682183.

So I don't get the value as you stated 142.89848614  ???

Edit: Also You sold PPT.C for higher average price than PPT.B, but estimated income was lower for PPT.C.

Thanks for such an extensive explanation  ;)
 
But unfortunately Your explanation means that investors cannot forecast dividends, paid for holding PPT.DIV bond, until You publish them here, they are only able to do some approximations :-\

No complains at all, just doing due diligence  8)

Like I said, I am not complaining at all ;)

Usually, in order to gain competitive advantage, investors wish to know maximum amount of information available and/or predictable.

In our case:
To make a "good deal" on PPT.DIV one would like to estimate (approximate) dividends on PPT.A (bidding info is already published) and after tomorrow's sale of PPT.B, quickly estimate future dividends on it and adjust correct price of PPT.DIV, while other market participants still await for public information about dividends in this thread  ;)

And a small question, when you estimate income of PPT.x bond, do you use compounding interest rate of 27 days 22hours?

Hmm, someone was selling and I've picked up almost 500 PPT.DIV shares at an average of 1.02-ish.  With dividends delivering 4-5%/week returns someone obviously wanted out.

Out of curiosity, how did you get 260.35 for the first issue of PPT.B? According to the numbers in your spreadsheet, you sold 2000 shares for an average price of 1.0812 and a total value of 2162.443. If you started with 162.443 from the issue, how did you get 260 for the dividend?

Take 2162 coins, deduct fees (8 BTC for the asset issue - would have to check trade/transfer fees).
Stick it into BS&T and compound for four weeks.
Remove 2820 (approx) from BS&T
Pay out 2000 * 1.28 = 2560
Pay dividend out of 260 (approx 3%/week return for that week)

I was looking over the contracts and threads for PPT.DIV and PPT, and I didn't see the answer to a question I had. If for whatever reason Pirate decides to wrap up his operation and return deposits without defaulting (or PPT decides they don't want to operate anymore for whatever reason), there should still be money left in the in the insurance fund after paying out the face value of the bonds at the scheduled time. If that happens, does the excess BTC in the fund get distributed to PPT.DIV shareholders, or to PPT shareholders? I would assume the former, but I want to make sure.

Does the bolded part refer to repayment to the PPT.X bondholders for their 0.32BTC/bond, or the PPT shareholders?

On first page I asked the same question and didn't receive a straight answer. So I guess he doesn't want to answer.

So you did. Patrick's answer sounds like they're payed out to the PPT shares, not to the PPT.DIV shares. That's what I was hoping to hear. :)

I would assume, if Pirate returned all the funds without a default, Firstly the current bonds would have to be paid out (and that would be the full 1.28). Then any funds remaining would be used to buy the PPT.DIV shares back (which would be at about 0.4 max), before the orginal PPT shareholders got any funds back. As the original shareholders sold the PPT.DIV shares to cash in their holdings originally.

Phil

Question: how did you get a referral?

Sorry, thought the language in the contract and original posts was sufficiently clear.  This was a point we looked at carefully at the beginning.  To re-state:

1: PPT.DIV shares get the profits.
2: The insurance funds are not profits.

Filharvey has almost set out the steps for a wind-up without a default (ie, BS&T shutting up shop).
1: Pay out all bond holders the 1.28
2: Pay out any profit from the bonds to the PPT.DIV shareholders.  That's a final payment.
3: The PPT holders are refunded the deposits used to create the insurance fund.

The value in the PPT.DIV shares relates to two key metrics and your assessment of them.  First the level of dividend each week currently running around 5%, and second the length of time the PPT bond continues to run.

At a simple 5%/week, that gives a 20 week payback and is actually one of the highest paying assets on GLBSE.  However, unlike those other assets, people are worried about default and how long it will all last, so that is the unknown.  I have a personal view about the value of the shares and that's why I've been buying extra.

Do you feel that will continue? The 5% is heavily influenced by the great dividends on PPT.E when 6000 shares were sold on accident, but since all the other PPT options came out the dividends have been (estimated) to be 0.0246 and ~0.037, and even then Friday's B sale would have been ~0.027 if that 250@1.3 had been entered as 1.03 and the 250 bonds had sold at 1.038 along with the rest of them. That's less than half the returns you can get through the uninsured Pirate passthroughs or the PPT.X shares themselves, but with more risk. My quick back of the napkin calculation shows that to make a consistent 0.05BTC dividend on 3000 shares would take an average sale price of almost 1.1BTC/bond, and I just don't see that happening anymore.

That's a completely fair assessment, and why everyone has to make their own valuation. 

Without the PPT.E sale and a few other things that happened, including some opportunistic bidding and competing products, we still had between 6k and 8k of bids (not sure of the exact number).  Longer term I expect returns will settle down into the 0.05 to 0.07 dividend each week, and even if it was only 0.04 I'd be happy.

Do I think it is going to continue to provide good returns, yes and as a result I have been buying (about 500 this week).

Can you explain how you got that number?
Edit: NVM, it's the average of the last 4 sales.

Just wondering what time the dividends are due to be paid today.

Phil

For explanation, the 1.04 was arrived at by a fairly simple mechanism. 

The interest rate available for PPT will probably be 6%/week and previously it was 7% for four weeks.  4 * 6% is 24%, but the mechanics of the contract is tied to the 1.28 payout so it was easier to set 1.04 rather than lowering the payout to 1.24 to give effect to the interest rate change.

Can we conclude that a failure of this motion results in the PPT closing down? What I take from the contract is that this basically renders PPT.DIV shares worthless, seems like an easy decision?

Actually no, that doesn't happen so easily.  The way the business is set up doesn't allow it to be shut down like that, and it's not an "easy" decision.  However, we also need to protect the value of the business and return acceptable returns to the PPT.DIV holders.  Obviously making a perpetual loss renders the DIV shares worthless, but we're aiming not to incur losses with the change in payable interest rates.  This was well signalled even as early as the very first PPT.A issue - if the rates change, so do the payoffs.  Because we have voting shares with PPT.DIV, the motion is required to be put.

Thanks, I generally support the motion but am a little concerned that increasing the price could see the market look elsewhere.

I've just answered a pm and then saw the post and thought it might be worth repeating the bulk of the contents here, particularly because of the comment about the "market looking elsewhere" and certainly we have been watching the progress, success or otherwise of this venture keenly with each passing bond auction, and the growth in competitors.


_______________________________________________________________________________ ______________________________


The notion of just shutting up shop (ceasing) is not so straight forward because we have a duty to protect the interests of PPT.DIV holders and that includes those of us that have/are/do hold those shares.  Also, the current case is not one where we actually have an option to simply stop trading.  Pirate has not defaulted, and BS&T is continuing.  The only way we see that would be possible is if all of the outstanding shares were held by someone wishing to cancel them (say, if I held all 9000 DIV shares).

It was anticipated some months ago that the interest rate might change.  The choices in that circumstance would be to wind everything up (undesirable as people have invested in PPT.DIV for the profit share, and the underlying premise/operation can continue), or reset the payment based on the new interest rates (which we have determined is the best course of action at this time - pending some other other we had not thought of).

If the motion were to fail, the PPT offer would still take place.  For this week it would have around 3.5 weeks of 7% interest and one week of 5% or 6% depending on the size of the BS&T deposit (maybe 7% but less likely).  For the following week it would be 2.5 to 1.5 and buy the time we get to August it would all be on the new rates.  Leaving the current floor of 1.00 and paying 1.28 on maturity when income is 0.24 (say) would incur a loss and the PPT.DIV dividends would, of course, fall to zero.

The other big change in the PPT.x space has been the large group of copy-cat offers where people can buy large quantities of pass-through bonds.  That linked to the very large availability consumed by those offerings took a lot of value out of our business.  Having seen todays reaction, that looks set to continue.  Also, people do not appear to value the insurance - it has been derided as a gimmick by some, but fundamentally it seems people are all in on the BS&T risk, or invest somewhere else.  Back in late April and early May, the market was more concentrated, since then, bidding has been around 1.02, and that is not a profitable level going forward, so we have to do something now.  Certainly the auction this week should clearly indicate how buyers of the PPT.x bonds assess and value the changes.

Overall, Burt had a brilliant idea back in April and we (the six of us) collectively put in a lot of work to make something that did work, and put around 4000BTC at risk.  We had a lot of requests to make a share of the profits available and the best option was to segment the profits from the underlying capital and operations - and we did that.  There was potential for the whole thing to blow up (pirate default) and there still is, but it looks like BS&T is running a while longer yet.  However, competition has also come along with people prepared to run pass-throughs for virtually no margin.  In hindsight, we would have collectively been better off leaving 4k in BS&T.  But for now, PPT.x offerings are set to continue as there isn't an event that would cause or allow a winding up of the company.

The average selling price was close to 1.04 anyway.  It will probably stay close to that , maybe a bit higher.

Ok, I'm the one you answered PM and I must admit that my skills are not sufficient to fully follow your answer you also posted here.

I invested heavily in PPT.DIV assuming the issuers are passing the risk for putting their money into the insurance fund to the shareholder. This would include the right to receive parts of the profits of PPT operation, but also an equivalent portion of the coins put into PPT insurance fund. My bad I was not reading the contract carefully enough but instead assumed what was obvious to me. Now I got that PPT.DIV is only limited to the first part (getting part of the profit as long it goes), but not for the second.

Being confused I was asking you a simple question: what happens to PPT.DIV shares if your cartel decides to stop operation next week, but not because Pirate defaults but (let's say) you all had better things to do? Right now it seems that shares are getting worthless, while you cartel members can grab your coins back from the risk fund and profit from the shares you all sold to the public.

I hoped for something easy to understand, like: Yes/no, if we stop, you are/aren't fu**ed. Instead, you responded long, but missed to clarify.

You wrote
but nowhere in the contract it is written that you have to. Not implying this is what you planned to do, but as soon as all 9000 shares are sold to the public (or say 8100), what prevents you to cease PPT operation, start PPT2, and issue PPT2.DIV? Other than we all know you are just nice guys ;)

It's always a bad idea to first buy and then think, but in this case I feel that the risk/chance distribution between issuer and holder is quite unbalanced.


If I got it wrong, sorry for yelling. And thanks for taking your time.

Yes. Investors need to learn this. All the information was there at the beginning to help investors form their own valuations. My initial bids when this asset launched were out bid so I missed out, but I was not perturbed. It is a mistake to overpay, even for a good asset.

That said, I don't think this asset is dead yet.

But not changing the auction time to more Euro-friendly direction?

I think you might find those additional investors with right risk preference simply by adjusting the auction time. IMO insured bonds are your strenght, not weakness. Unfortunately I can't show it to you fully until the auction is changed to be held at a more reasonable time. Which is kinda sad, cos I just found your great products and I like your professional touch.

Hi Zefir - sorry for making a long-winded pm in response.  Let me try with the short version - you're not completely screwed (and that's not supposed to be financial advice).

Realistically, the change in the pass-through business and competition changed the value of the DIV shares several weeks ago and that is reflected in the recent average trade prices around 0.6 (5-day average).  We have looked at several different options to retain value based on the original premise including issuing more, issuing uninsured and running different auctions for different time-zones.  (cedus - still nothing preventing you putting in bids at a time that suits you given the low prices and thin bid volumes).

As for the , that's not written in the contract, and nor should it need to be.  Simple principles of company law require Directors to uphold their fiduciary duties to stakeholders.  Plus,  screwing over shareholders is an incredibly stupid thing for an issuer to do and would do considerable damage to the other business that we (the PPT issuers) are involved in.

As for future value - that's still an unknown. 

Thanks for clarification, Patrick.

Really didn't want to imply any complains - already admitted that I'm to blame for not reading the contract carefully enough.

Voted for the motion and am quite confident that this will remain a highly profitable investment.


Cheers!

So, when PPT shuts down...

With an insurance fund of ~3800 BTC, and 9000 PPT.DIV bonds, assuming that PPT could withdraw their entire principle from Pirate without default, each PPT.DIV bondholder would be looking at a ~0.42 BTC buyback. Can you confirm this is correct?

No.

PPT.DIV gets profit.  The insurance fund is not a generated profit, but funds contributed from the six founders.

Profit is net income after expenses/costs, not gross.

In response to some sensible questions from PPT.DIV holders, and some quite stupid and ill informed comments by some others, I have decided to make a stand in the market for ALL PPT.DIV shares at or around 0.25   I have 6,250 bids currently placed.  This represents at least three months dividends based on 0.02/share which is current, and does not include any further drop which I calculated today might see it fall to 0.01/share per week.  This price also reflects the fact that a few months of dividends has already passed.

Hey bro,
How'd you get a referral again?

They're in cereal boxes.

Considering that you sold them just a few weeks ago at 1.00 (or maybe even more), buying them back at 0.25 after you've just voted to shut down the business is extremely generous from you :P

Just make sure to let us know which enterprise you are going to start next, so we could buy some other, great, brand new shares from you. :)

I make up my living by doing a honest work, not by selling illusions to unconscious suckers.

Well, I have some funds deposited at BS&T, so if you want I will be more than happy to provide you with the same kind of service as your business is giving.
You give me 1000 BTC every week and each time I return you 1240 after 4 weeks. Unless BS&T defaults - in such case I only give you back 25% from your total 4 week-span investments.
How about that?  :)

I never said that I was going to deposit your first 1000 BTC at BS&T.
I was only going to use it to insure my current 1000 BTC deposit...
This way when Pirat runs away with my money, I will have your 1000 BTC, from which I will give you 310 BTC while keeping remaining 690 BTC for myself...
If Pirate doesn't run away with the money, I will just give you back 1240, keeping my initial 1000 BTC and the 70+ BTC extra from the weekly compounded interests.
Either way I win: in fist case I get a free 69% insurance, in second case I get 7% monthly interest.
Now, if I start cycling it, accepting a new 1000 BTC each new week, while putting the previous one into BS&T - it will eventually become 100% insurance for my deposit, while still holding it at 7% monthly...

As I said: I'm not going to delude unconscious suckers, because I just find it dishonest.

I offered it to you, a conscious businessman, but you obviously are not going to be one of my customers, since you understand very well that this schema is only benefiting me at your cost.
You understand very well that the 25% insurance which I'm "giving you for free" doesn't cost me anything and the risk is still all yours...

I am interested at the number of lies you managed to squash into that post.

1: I did not sell my PPT.DIV shares a few weeks ago.  Over the past few weeks I have purchased and sold shares on my own account.
2: Those I have sold were at an average price much lower than 1.00 and my decision to sell was based on information fully publicly available.
3: The vote was not to shut down the PPT.x offerings, but to change the floor price.

It would appear you wish to ignore the facts that are available and slander various people along the way.

You are not considering opportunity cost. You 69% insurance is not free. It comes at the cost of lower earnings, i.e., getting only 7% every four weeks instead of 31%.

Of course 7% is less than 31%, but if you can get it 100% insured by the buyers of the cycling bonds (which PPT has already managed to do), then it is a great 7%/month, risk-free business, isn't it?
And I don't have a problem with it.
What I do have a problem with is the propaganda campaign aimed to delude more suckers into believing that they get a "free insurance", because the PPT holders are generously giving it to them risking own capital... Yeah, sure - just how stupid one needs to be to buy it? :)
Shame on them, for selling lies like that, instead of just admitting the truth.

That's great. I'm glad that after 2 days we finally got to some common conclusion.

I'm done with this topic, like I was done with it already 2 days ago, after making my point the first time.
Unless someone else wants so express his opinion about how stupid and misinforming I am? In which case I am happy to continue with him...
Because no matter how many times I have made my point, don't expect me to sit quiet while I am being insulted by some moron or a crook.

Anyone know why there was only 8999 shares of PPT.DIV payed today?

Darn bitcoiners can see solutions. Stop being so good at maths (http://www.economicpolicyjournal.com/2012/07/peter-schiff-tries-to-school-confused.html).

Would you guys be willing to go through the accounting on one of the previous sales to show how you arrive at the exact value for the dividends? I keep track of them after the sale in a spreadsheet, but I can never get the numbers to quite match up and unmatching numbers bug me. :)

I think the issue might actually be the GLBSE fee. Previously you paid the 0.5% fee as the market taker, but if you only sell 1000 bonds in the initial offering at 2am and the other 2000 sit on the market, then you don't have to pay the fee, the buyer would have to cover it. I imagine it would make accounting a nightmare, but as long as they don't sit on the market too long it might actually increase the profits a little.

Yes I think it's my fault. I have lost a PPT.DIV in the system. I had someone send a test amount (just 1) and followed the transfer instruction wrong. Anyway, I still haven't got it returned to my account yet. Not heard back from Nefario about it either, but I have reported it twice.

This has turned out to be a compound bug, when an asset is sent incorrectly to another account (this only happens when sending to an asset issuers account) it's put into an account without any owner, kind of in nomans land. It's an obscure bug that has effected two people thus far, annoying but not fatal (no one loses anything).

When the buyback happened the amount was for the full number of shares but only the full number -1 (the share in nomansland) could be paid resulting in the payment error.

I'll be getting the "lost" asset returned in the morning and they'll get the dividend they missed as a result of this.

Nefario.

This has been solved, and the user has been compensated the dividend they missed.

Nefario.

How do you handle the bonds not selling immediately in terms of reduced income from Pirate? This is from the main PPT thread.


It appears from the numbers that you are covering the gap out of your own pockets. A quick calculation for the last PPT.C shows
Profit = (3000*ASP - 0.005*Bonds Sold Immediately)*1.07^4 - 3000*1.28 = (3000*1.04153861 - 0.005*1462)*1.07^4 - 3000*1.28 = 246.152
Dividend = 246.152/9000 = 0.02735
That's only 0.16% off from the actual dividend, so I would assume my numbers are correct minus whatever other small expenses there are.

Are the six of you going to continue covering this expense out of your own pocket? My understanding is that Pirate calculates interest hourly, so the lost interest vs selling them immediately would be close to 25BTC for the PPT.C bond issue.

GLBSE GLBSE ‏@GLBSE

trade:531@0.35:PPT.DIV:1343944773 8m
trade:185@0.36:PPT.DIV:1343944773 8m

Wowzers, now that's a dip. And less than a week after I had to buy back the shares I borrowed to short. :P

With a dividend of 0.02681571, that's a 7.45-7.66% return, better than Pirate!

Sshhhhhh

Long term yield on equity investments is supposed to be lower then the bond market. For Patrick buying all the shares sounds like a good deal though as he has no counter party risk by being the other party + he knows when/if the business will stop (The DIV shares will be worth zero whenever the business stops and have no claims on any capital).

Actually, one of the reasons I purchased the PPT.x business was to make sure it continued.  I have no intention of shutting it down.

It is a nice little cash cow for the owners and serves a market need left open by the other passthroughs with the buyback at a particular date and time along with a decent amount of secured insurance.

I would like to apologise for a hiccup in payment of the PPT.DIV dividends this week.  There was a miscommunication between myself and Burt resulting in a late payment.  Sorry.

Ok, which creative PPT.DIV founder decided to advise the Poway Unified School District on how to structure debt (http://globaleconomicanalysis.blogspot.com/2012/08/ponzi-financing-in-poway-california.html)?

lol - GFC Mk7 in the making (and again from one of the least solvent of counties in the USA).  Didn't the US learn anything from cheap credit (i.e. you have to pay it back)  Learn to live on the cash you have before borrowing.

In other news, I noticed PokerStars has been more sucessful than the entire Bitcoin economy with their ponzi - even after paying back 30% of their clients funds and $547M to the US government those not in jail walk away with millions.

The deal will end the saga of Full Tilt Poker, a company built by Ray Bitar with the help of poker champions like Chris “Jesus” Ferguson and Howard Lederer that Preet Bharara, the U.S. Attorney in Manhattan, has repeatedly said was a Ponzi scheme. But Bharara’s crackdown on the online poker industry continues, including against Isai Scheinberg, the founder of PokerStars, who has been indicted by Bharara for operating an illegal gambling business. Bitar, who recently returned to the U.S. from Ireland to face the criminal charges Bharara has filed against him, pleaded not guilty and is currently out on bail. Scheinberg is believed to be in the Isle of Man.

http://www.forbes.com/sites/nathanvardi/2012/07/31/pokerstars-will-pay-547-million-to-settle-u-s-government-charges-and-buy-full-tilt-poker/

The PPT asset transfer is progressing, and I was a little late with the timestamp for this week's sale at 2:00:18 and completed at 2:00:21.

After fees, 3125.399366BTC was realised for deposit. 
Compounding should take this to 4096.761019 and after the 3840 buyback, leaves 256.7610186 for distribution (0.0285290 per PPT.DIV share)

Asset transfer is complete.

The estimated running average of the latest four dividends is 0.028529 per week.

New rates for BS&T have been announced and are expected to take effect in about a week.  This changes the profitability of PPT.x and PPT.DIV as the contract requires a full payment in the event of an interest rate drop.  Initial calculations suggest the change will cut the dividends as follows:

PPT.D   0BTC
PPT.E   43BTC
PPT.A   119BTC
PPT.B   193BTC

These numbers are approximate.

The next issue (PPT.C) will be at a new strike price to maintain a fair balance between the partially insured nature of the bonds and the new 5% underlying BS&T rate.

Those will be payed in reverse order, correct? IE next Monday will pay 0.0214 per share, the week after will be 0.0132, then 0.0047 and 0.
Do you know what the new rates are and will the new strike price return normal dividends to the 0.025-0.03 range?

The above numbers are an indication of the reduction in dividend from the calculated ones done at time of sale.  So the next dividend will still be 246BTC in total.  The one after 255-43 = 212BTC and so on.  The PPT.B's that are most affected will be around 256-193=63BTC.

Learning of the change this morning the priority was to get some information out to people, and yes getting the right level for the balance between premium/insurance/dividend and demand for product all goes into that mix.

I have been giving this quite some thought and want to provide an opportunity for feedback before implementation.

With the recent changes (in July and now in August), it is a good opportunity to reset the PPT.x offerings back to their original formula.  That is, issue at 1.00 and return four times the top BS&T interest rate of 5%, so repaying 1.20.

I believe this is most consistent with the original offering and changing the floor price from 1.04 to some other number to balance the needs of investors and dividend right holders is guaranteed to get the balance wrong.

I think that a selling price of 1.00 is best. Just sell them for 1.00 and buy them for 1.16 (or something like that). It's simple and straightforward. You are competing with the other pirate bonds, so it is important for investors to be able to easily compare your rates to the other bonds. I don't think investors care what the BS&T rate is as long as your rate is competitive.

I hold a little .DIV, and I typically am holding a little of each of the active [.A .B .C .D .E] at any given time.

I think your plan of having them mature at 1.20 BTC makes the most sense to me. As it is tied to the public BS&T interest rate, it is easy to grasp.

I have seen the arguments about how the eventual redemption should be pegged to some mystical 1.00, as that is how things are done 'in the real world'. I really don't give a bilge rat's nethers for how things are supposed to be done, as per the models built for exchanges dealing in fiat.

Accordingly, I think I like the model that has been adopted, where bonds open at a nominal 1.00 face value, and are redeemed for 1 + daily interest * 28. But my argument amounts essentially to nothing more than 'it is what has been our mode of operation'.

I guess the counterargument would be that redemption at 1.00 might lead to a more profitable IPO. I suppose it could, but I would think this would be a wash.

As far as the initial sale price, the greedy .DIV owner in me would like to see what little profit we have maintained. If all bonds sold at 1.00 (or 0.83333), and redeemed at 1.20 (or 1.00), there ain't any (.DIV profit, that is). Indeed, after overheads, would we not be running at a loss? Issues have been selling out, albeit slowly, correct? I certainly don't want to be subsidizing the operation. We need a floor somewhere. I would think you would like a minimum offer price that ensures you are compensated for your time and effort in running the operation.

As far as the 1.16 comment, I don't know what to think about that...

Thank you for the views expressed - 1.00 and 1.20 seem to be the preferred numbers (and makes things clear).

I will hold off another day before confirming.

I am aiming to provide as much information as soon as practical as there are obviously people with a strong interest in this (not the least myself as I hold around 1/3 of the PPT.DIV shares).

I have 246.6BTC reserved for the dividend on Monday and I believe that should still get paid as the current buy-back will be occurring at UTC00:00 as planned.

Beyond that, the drop in interest rate to zero is going to severely hinder profits.  My initial calculation is that there will be one more dividend totalling approximately 90BTC.

After that - kaput.

Aye aye - it seems as if we shall be sunk to the bottom, to sail the friendly seas no more.

As a starfish, you may have some coping mechanisms. As a land-dweller, I might be able to use a few tips in sea-floor survival. :)

edit: spelling

While my on-paper position halved this weekend, it's still not terrible.  win some/lose some 

Yesterday while doing some nothing I was thinking about PPT.x and the DIV shares (and I have 246BTC reserved to do tomorrow's payment) and was thinking that it might be able to be "repurposed".  After all, the assets cost 8 coins each to put in place.  What I need to work out is how/what would fit into the current structure.  This is just an idle idea at the moment so please don't read anything into it.

My thoughts exactly. The risks were clearly spelled out. I knew this would be a possible outcome. I have a good attitude about it :)


If so, that would be great.

PPT.DIV distributed a short while ago.

Do you have any plans for the future, or "kaput"?

There will be a small dividend next week.  After that, the plan is uncertain.

I personally think now, after purchasing the ppt.div shares and luckily selling them without too much of a loss, these shares were designed so that the some of the original members off ppt could make silly money easily.

Basically when initially sold, some of these shares we're being sold for 1.4+ btc this allowed the original members to make money, on the prospect of future dividends. Yes it looked rosy, hence why I owned quite a few for a while. But with the fact that these share were not protected by the initial investment into ppt means that they needed several years to break even.

I do feel sorry for Patrick, as he has helped keep up the price of ppt.div and probably owns a lot more than he should. But some of the members of the original group, made some silly money on these shares. The fact that these shares never really had any chance to make back money is crazy.

Even if they were backed by the value of ppt coins invested by the original partners they should not have been selling for more than what 0.45 or maybe more?

Phil

Going back some months I actually thought a reasonable value was 1.0 and higher but it was not appropriate to say so.  I did sell some, but I was also buying - simple trading unrelated to the underlying, just the value of the dividend stream.  But with the proliferation of the other PPT schemes, the dividend fell to 0.02 and that made the payback much longer.

Also remember, there was some silly money being offered and we had several requests from people wanting to be within the original group.

Anyway, don't feel too badly for me, there were some pluses and minuses and while I'm probably down overall (and still have a 4000BTC contingent liability on this) it's part of the market.  And I still have my 3,791 DIV shares.

Patrick

If you can figure out pirates business model and implement it even on a smaller scale you could rename these bonds to Patrick's Pass Through since it already has the right initials  :D

I'm sure anything you want to do with these would be a great use once all the pirate stuff finishes out. I'm sure there's certainly people willing to throw money at Patrick for just about anything he wanted to do. Not to mention you already have almost $500USD sunk into security names alone (Although I assume Patrick wasn't paying all of that out himself). Any interests in running anything specific Patrick?

I was thinking about PPT again today while working on something else (related).

Currently there are some bids (bid walls) up for the three outstanding bonds as part of the insurance underwritten by myself.  It occurred to me that, for those people that exercise the insurance option, that reduces the total liabilities of the PPT system and IF (rather than when - I don't know) Pirate releases funds, that will be PPT profits.

At the moment approximately 200 of each of E, A and B have been redeemed.  The implied value per share is roughly  600 * (1.28 - 0.32) / 9000 * P(BS&T repaid) = ??

I had originally assumed that if I paid out the insurance and received the coins back from the BS&T account, I would get to keep it, but under the contract that is wrong - it would get divided up amongst the PPT.DIV holders.

I provide this as information as I believe the market has a right to know and understand (or determine for itself) if this has value.

(Disclaimer: I have a material interest via my own PPT.DIV holdings, but I am choosing not to trade any PPT series assets.)