The underlying asset (on BTC.CO) stopped selling new shares about a week before this pass-through started.  He still pays dividends etc.  Dividends used to be paid weekly but are now paid monthly (contract allows either) on the BTC.CO one - got no idea what happens on the pass-through.  I took a look at the pass-through, saw it was trying to charge 25% more than the BTC.CO one and havent looked at it again since.

Am I correct that you're selling shares in the pass-through before you own corresponding shares in the actual underlying asset?

If so, isn't that breaking your contract which says "Each GSDPT is backed up by one share of S.DICE share." - as any purchases are NOT backed up, you just hope to be able to back them up later.

Yes - putting them up at half price (which you didn't even do) would only halve the value for anyone who HAD to sell their shares before your order was filled (surely a very small number of people - if any).  For anyone planning to hold the shares for more than a week or two the impact is likely minor judging by the speed the 1 million sold at.

Thanks - I imagine a lot of the really pissed off people are ones whose buy orders got filled when you dumped the block, leaving them sitting there watching shares at 0.0044 slowly disappear.

That's not strictly true - in an ideal world it would be.  The main reason it isn't true is simply because there's a lack of alternative investments of a similar quality.  Because of that, investors who want a (relatively) safe place to park BTC and earn BTC-denominated profit can't value or buy based on P/E ratio - as there's not a sufficient range of options for them to be picky or comparison-shop.

Whilst I agree the shares only HAVE value because they earn income, the price at which they trade (which IS the value whenever someone wants to sell - and every trade has a seller in it) gets set based not just on what the income is but also on what supply and demand there is.  Increasing supply DOES lower their value for anyone selling.

And if anyone needed to sell just when you released the block then rather obviously your action had a significant effect on the value of their shares.  I think maybe you miss that in some circumstances the realisable value of something IS it's value - there's no magic value which applies to everyone at all times in any practical sense.

It also has a more significant impact on those (like myself) who trade rather than invest (for me S.DICE is a commodity not an investment) - but traders aren't (and shouldn't be) your concern.

The price you sell at should have NO long-term impact on the trading price of the shares - but the fact that you sold at all does (as it increases supply).  The extent to which price and value are linked is debatable - but claiming they're entirely unrelated is plain wrong.

Just had a quick look - think you may have misunderstood one of the NO votes.

You say:

"For those asking about what happen if issuer shuts down the asset, I would not
do anything. It's a simple pass-through for those who don't have an account on
MPEx. As already stated in the contract."

It may be that what they want to see in your contract is that if the issuer does a liquidation/forced buyback then you'd pass through all funds received from that to shareholders in the pass-through.  As such funds aren't dividends they aren't covered at all in your contract.

Alternatively it could be that whoever voted that NO wants to know what will happen if YOU shut down the pass-through (I assume you'd sell shares on MPEx then distribute the proceeds without taking a fee).  Wasn't me who voted - so don't know for sure which of these two was being asked.

You may also want to add info on your pricing policy.  Say you buy shares at 1 BTC each, do you then sell them at 1 BTC, 1.1 BTC or what?  If price then falls on MPEx to 0.5 do you then relist the shares you bought for 1.0 and 0.5?  i.e. do you sell at the price you bought at or track MPEx prices?

Well there's obviously practical differences when it comes to things like paying dividends.

I mainly wanted to be sure that you were applying the same interpretation of the contract consistently.

I think the disagreement on interpretation stems from the use of the phrase " issue more shares on any other venue".  You believe (and in general I agree) that issuing is something that happens before shares are placed anywhere.  Which makes that phrase meaningless as you don't issue on ANY venue (whether more shares or existing ones).  If that phrase had read "issue more shares and then sell them on any other venue" then the meaning would have been clear.  Instead, by suggesting that the act of selling on a venue was "issuing" it leads toward my view of the interpretation.  And the act of selling COULD be issuing if the MPEx listing is considered to be a pass-through (NOT a cross-listing) to 10 million of the 100 million privately issued shares -as then more shares would need to be issued on MPEx before further sales (as it would be an expansion of the pass-through).

Yeah - that emboldened part is 100% applicable to mining.  In fact the situation is even worse in mining - as the barrier to entry for new miners/mining companies is very low.  And the fact that investors will happily let mining companies start where the manager is paid regardless of whether profit is made adds to the problem - as it means there's incentive for people to run mining companies even if they've noticed/calculated/guessed that no profit will be made on the venture as whole (their personal profit is, of course, assured).

The very last paragraph of your quote was also very relevant.  There's some otherwise fairly smart people running mining companies well - the comapnies still, of course, make a loss.  You'd think someone smart enough to run a business well would pick a profitable area to run one in.

I wasn't asking about a pass-though but about a cross-listing (of some of the existing 100 million) on a second exchange.  In a cross-listing the shares on the other exchange wouldn't be represented at all on MPEx - which is different to a (properly run) pass-through where each share in the pass-through is backed by a share purchased through and tracked by MPEx.

No - he said he each 1 million of THIS 5 million will be higher.  He said nothing about further sales thereafter.  The expectation has to be that next time he (or another private investor) wants cash fast they'll dump again.

Which isn't necessarily a bad thing of course - but will tend to depress the price I'd expect.

Just to clear up one last thing for me.  Do you also agree that nothing in the contract prevents him listing S.DICE on another exchange and selling some of the current 100 million shares there?  (Not suggesting that he should or would).

Really?

SO why does the contract say : "The representatives of SatoshiDice solemnly promise and warrant never to issue more shares on any other venue"

Clearly whoever wrote the the contract believes shares can be issued on an exchange or that sentence would make no sense (as the "any other venue" part would be meaningless).

EDIT: To show the implications of your semi-interpretation, were you correct then evorhees could list S.DICE on a different exchange and sell more of the 90% there at .0001.  That would be possible as you think issuing has already occurred in every possible sense for all 100 million - so none of the restrictions apply (The restriction on other exchanges only applies to "issue more").

Do you believe that's allowed?  Does MPEx?

And you still havent given any example of where the pricing restriction on sales applies ...

Yeah the debate may well seem meaningless (I'm guessing it's only the slowness of deposits to MPEx that have made the block last this long)  - however:

1.  Contracts need to be respected.
2.  It'll become relevant again when next 5 million/10 million go up after this lot sell.

Why he did it is neither here nor there - fact is only 10% of shares were issued on MPEx.  He's confirmed there were other private owners of portions of the other 90% - so very clearly that 90% was unissued on MPEx.

I repeat yet again: give an example of that pricing restriction applying without the contract otherwise being broken.  If you believe my interpretation is wrong then give an example of YOUR interpretation being applied in practice.  If you try it with a stock-spilt you'll immediately see it makes no sense - as the pricing would be wrong plus there'd be nothing being sold to HAVE a price anyway.

Look at the accounts.  10% MPEx dividend.
Look at the dividend paid on MPEx - 10% of profits.

Before today only 10 million were active (let alone traded) on MPEx.

Stepping back from the contract issue briefly - yes, they represent great value at that price. 

But getting back to the contract issue, contracts have to be adhered to - whether or not the breach gives good value to new investors.

There's a difference between creating/issuing shares in a company in the abstract and actually issuing them on an exchange.

You need to look at the two sentences together:

"The representatives of SatoshiDice solemnly promise and warrant never to issue more shares on any other venue nor in any way to dilute existing shareholders at any point in the future. All future share issuance will be made only a) subject to approval by MPEx and b) at a price no less than the higher of the 1 day average price and the 30 day average price then current on MPEx ; "

The first sentence explicitly prevents authorising or issuing more than 100 million shares (as, by definition that would dilute).
Are you seriously claiming that the second sentence then defines the price at which shares which have just been defined as impossible to create can be sold?

Yes - in theory more shares COULD be created by a split.  But the pricing can't apply to that due to the very nature of a split.

If 100 million shares had been created on MPEx, 90 million of them given to evoorhees to do what he wanted with and 10 million sold then I'd agree with you.  But that's not what happened.

10 million shares were issued on MPEx representing entitlements in respect of 10 million underlying off-exchange shares.  Issuing new MPEx shares in an action seperate to changing the underlying shares - and the only act to which the second sentence can logically apply.

I repeat: Give a scenario that is otherwise in accordance with the contract where you believe the pricing restriction would apply?

Yeah that would - but is pretty irrelevant to what we're discussing and would be rather suicidal given the pricing restriction

Simple challenge to those who disagree with my explanation of the contract.

Give a scenario in which that pricing restriction would apply without the contract being broken (by, for example, dilution).

Plus they weren't "gobbled up" - a lot of them were sold into existing orders when the block was put up.  That's not gobbling up it's force-feeding.