[CLOSED] S.DICE - SatoshiDICE 100% Dividend-Paying Asset on MPEx

[MPOE-PR]

Quick announcement - This month is progressing well with site performance. I am going to take this opportunity to have SD retain up to 4k in earnings for June at the end of the month. This means that dividends on earnings up to 4k won't be paid for June (ie - if the site earns 5k, then dividends will be paid on only 1k of earnings).

Before you yell and scream, let me explain the purpose.

Currently I have, personally, provided an ongoing interest-free loan of roughly 6100 btc to SD that is used by SD as its betting pool. This is money that is at risk of hacks and losses, but I've permitted SD to use it because it needed a capital pool. The risk to me was tolerable when Bitcoin was $10-12 each. Now, however, that's a ton of money, and I would like to withdraw the loan.

Thus, earnings for this month (June) will be retained by SD for the purpose of replacing this pool. The pool needs to be roughly 3-4k btc, so the site is on track to earn this amount this month. It's thus a perfect time to do the swap.

Note that because these earnings are retained and owned by SD, if and when they are ever paid out or released from SD, they will go to all shareholders. Thus the betting pool held by SD will from now on be an asset of SD instead of a liability owed to me.  Therefore MPEX holders will, after June, own 13% of the betting pool fund assets. If the site is ever closed down, sold, etc, these funds would be liquidated out to shareholders.

Hopefully that's not too confusing. Please let me know if you have questions about it.

Kind regards,
-Erik

Not only is it incredibly poor form to make such announcements unilaterally, whether the proposed measure is ever implemented or not, it'd seem on the surface that what you are contemplating is plainly in breach of your contract with MPEx.

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[Factory]

Not only is it incredibly poor form to make such announcements unilaterally, whether the proposed measure is ever implemented or not, it'd seem on the surface that what you are contemplating is plainly in breach of your contract with MPEx.

While I understand Eric's position- this would most definitely be breaking the contract held with MPEx. He stated the main reason he wanted to create this offering was to sell a portion of equity of s.dice so that he had less exposure to it and had some liquid btc. By providing such a large loan to s.dice goes against the entire reason he was making this offering in the first place. The way he is attempting to settle this loan is against the contract and is against the best interest of shareholders- something management must always be mindful of.

[nimda]

Wait a moment... I thought the money from the initial shares sold went to the pool?

[GeoRW]

Quick announcement - This month is progressing well with site performance. I am going to take this opportunity to have SD retain up to 4k in earnings for June at the end of the month. This means that dividends on earnings up to 4k won't be paid for June (ie - if the site earns 5k, then dividends will be paid on only 1k of earnings).

Before you yell and scream, let me explain the purpose.

Currently I have, personally, provided an ongoing interest-free loan of roughly 6100 btc to SD that is used by SD as its betting pool. This is money that is at risk of hacks and losses, but I've permitted SD to use it because it needed a capital pool. The risk to me was tolerable when Bitcoin was $10-12 each. Now, however, that's a ton of money, and I would like to withdraw the loan.

Thus, earnings for this month (June) will be retained by SD for the purpose of replacing this pool. The pool needs to be roughly 3-4k btc, so the site is on track to earn this amount this month. It's thus a perfect time to do the swap.

Note that because these earnings are retained and owned by SD, if and when they are ever paid out or released from SD, they will go to all shareholders. Thus the betting pool held by SD will from now on be an asset of SD instead of a liability owed to me.  Therefore MPEX holders will, after June, own 13% of the betting pool fund assets. If the site is ever closed down, sold, etc, these funds would be liquidated out to shareholders.

Hopefully that's not too confusing. Please let me know if you have questions about it.

Kind regards,
-Erik

Not only is it incredibly poor form to make such announcements unilaterally, whether the proposed measure is ever implemented or not, it'd seem on the surface that what you are contemplating is plainly in breach of your contract with MPEx.

+1, this wasn't anywhere in the contract. If you want to squeeze more money out of S.DICE then sell your shares. You already introduced several very questionable monthly expenses and now you want to steal further dividends and throw more risk on investors' shoulders. You already got paid very well and you should stick by S.DICE and make it better, not to flee sinking ship like a rat.

[GeoRW]

Wait a moment... I thought the money from the initial shares sold went to the pool?

That money went to Eric directly, which is basically the same. But he will say otherwise  Next step will be taking dividends in exchange for company assets (servers, website, know-how ...) 

[MPOE-PR]

I agree, but what exactly is going to be done about it assuming Erik just takes the money. MPOE-PR has no power to enforce anything (but delist the asset and screw over everyone who invested and thus keep the money like they did with the giga PT)

Be very careful guys...

This may come as a surprise to you, but the world isn't entirely made out in your own image. There's really two kinds of people: the adults, who actually follow contracts, and the infantile scum, who don't care what's right or wrong past the very simple "what power is there to force me do what I should do in the first place". This incidentally is why nobody gives a shit about what you have to say, here or anywhere else.

[DutchBrat]

Quick announcement - This month is progressing well with site performance. I am going to take this opportunity to have SD retain up to 4k in earnings for June at the end of the month. This means that dividends on earnings up to 4k won't be paid for June (ie - if the site earns 5k, then dividends will be paid on only 1k of earnings).

Before you yell and scream, let me explain the purpose.

Currently I have, personally, provided an ongoing interest-free loan of roughly 6100 btc to SD that is used by SD as its betting pool. This is money that is at risk of hacks and losses, but I've permitted SD to use it because it needed a capital pool. The risk to me was tolerable when Bitcoin was $10-12 each. Now, however, that's a ton of money, and I would like to withdraw the loan.

Thus, earnings for this month (June) will be retained by SD for the purpose of replacing this pool. The pool needs to be roughly 3-4k btc, so the site is on track to earn this amount this month. It's thus a perfect time to do the swap.

Note that because these earnings are retained and owned by SD, if and when they are ever paid out or released from SD, they will go to all shareholders. Thus the betting pool held by SD will from now on be an asset of SD instead of a liability owed to me.  Therefore MPEX holders will, after June, own 13% of the betting pool fund assets. If the site is ever closed down, sold, etc, these funds would be liquidated out to shareholders.

Hopefully that's not too confusing. Please let me know if you have questions about it.

Kind regards,
-Erik

I understand the need for a reserve, and that is why companies usually don't payout 100% of their profits as dividends.
But why now all of a sudden instate the whole reserve fund this month. It would be much more elegant to do it over a few months by paying out 75% of the profits and retaining the other 25% to allocate to the fund.... and again, it should have been like this from the start...

[Peter Lambert]

Not only is it incredibly poor form to make such announcements unilaterally, whether the proposed measure is ever implemented or not, it'd seem on the surface that what you are contemplating is plainly in breach of your contract with MPEx.

Could you please go into more detail how this breaches the MPEx contract (maybe I am just missing something?)?

Doing in gradually, with 10 or 25% of profits going to the reserve fund seems much more reasonable to me, rather than doing it all at once. Is this where the problem is, that the contract says 100% of profits go to dividends? Couldn't you just list it as an expense to pay off the loan which gets taken out before profits are calculated?

[evoorhees]

Hmmm why am I not surprised that this caused more fuss. Not a single, "hey Erik thanks for providing an interest-free loan of half a million dollars to SD for the past six months, I understand it's time for SD to hold its own betting pool."

MPOE-PR.... how does this violate the contract (either in letter or intent)?

nimda... why would you think the revenue from sold shares would be property of SD? They were my shares, which I sold, thus the BTC from that sale is mine, not the company's.  

GeoRW... I'm not trying to "squeeze any money out of the company." The 6100 btc held in the better pool belongs to me, and had been used by SD, interest free, since the creation of the site. I think it's appropriate for SD to own its own betting pool. There are two ways to do this: dilute shareholders to raise capital (which I will never do), or retain earnings for a period of time to acquire a betting pool.

Why is this contentious?

[evoorhees]

Doing in gradually, with 10 or 25% of profits going to the reserve fund seems much more reasonable to me, rather than doing it all at once. Is this where the problem is, that the contract says 100% of profits go to dividends? Couldn't you just list it as an expense to pay off the loan which gets taken out before profits are calculated?

Sure, it could be done gradually such that a % of earnings each month go to building up the pool. I'd rather just get it over with, do one single month without dividends and then problem solved. Remember too that 87% of the dividends would have gone to me and my private partner anyway. So I'm not treating mpex holders any differently than I'm treating myself. It's not like I'm paying my own dividend and then retaining the dividend of mpex holders. Is that what people thought I meant??

And yes I could write it off as a "cost" of SD, to create its own betting pool. But it seems a much better deal for shareholders if the earnings are simply retained as the betting pool. Then, the shareholders still own the btc. Instead of it being paid out in June, it sits in the SD wallet, paid out at some liquidation event in the future, and allowing the site to earn all its profits until then.

[Peter Lambert]

Doing in gradually, with 10 or 25% of profits going to the reserve fund seems much more reasonable to me, rather than doing it all at once. Is this where the problem is, that the contract says 100% of profits go to dividends? Couldn't you just list it as an expense to pay off the loan which gets taken out before profits are calculated?

Sure, it could be done gradually such that a % of earnings each month go to building up the pool. I'd rather just get it over with, do one single month without dividends and then problem solved.

"I'd rather ..." yeah, that is what would be good for you, but as the manager of SatoshiDice you have the responsibility to do what would be good for the shareholders. Seems there is a conflict of interest here.

[RationalSpeculator]

Quick announcement - This month is progressing well with site performance. I am going to take this opportunity to have SD retain up to 4k in earnings for June at the end of the month. This means that dividends on earnings up to 4k won't be paid for June (ie - if the site earns 5k, then dividends will be paid on only 1k of earnings).

Before you yell and scream, let me explain the purpose.

Currently I have, personally, provided an ongoing interest-free loan of roughly 6100 btc to SD that is used by SD as its betting pool. This is money that is at risk of hacks and losses, but I've permitted SD to use it because it needed a capital pool. The risk to me was tolerable when Bitcoin was $10-12 each. Now, however, that's a ton of money, and I would like to withdraw the loan.

Thus, earnings for this month (June) will be retained by SD for the purpose of replacing this pool. The pool needs to be roughly 3-4k btc, so the site is on track to earn this amount this month. It's thus a perfect time to do the swap.

Note that because these earnings are retained and owned by SD, if and when they are ever paid out or released from SD, they will go to all shareholders. Thus the betting pool held by SD will from now on be an asset of SD instead of a liability owed to me.  Therefore MPEX holders will, after June, own 13% of the betting pool fund assets. If the site is ever closed down, sold, etc, these funds would be liquidated out to shareholders.

Hopefully that's not too confusing. Please let me know if you have questions about it.

Kind regards,
-Erik

Erik, is 3-4k enough for the betting pool? What if sdice has an unusual unlucky month and goes over that?

Would you be willing to dedicate yourself to an open credit line for a few 1000 btc so that sdice is not broke in such case?

Thanks for having offered the interest free loan to sdice. It helped greatly in offering a strong capital basis to sdice in it's first year of existence. Makes good sense you want to withdraw those funds to your personal account.

[Peter Lambert]

I think MPOE-PR is refering to this part of the contract:

(f)Immediately upon publication of each Statement of Profit and Loss SatoshiDice will pay to shareholders as dividends a fraction of no less than 100% (one hundred percent) of the Net Profits, if any.

Which seems to be saying that the company cannot retain any profits.

[Yogafan00000]

The thing that irks me is the surprise of it all.  Shares are down and we finally get a good month, and this announcement is a bit of a kick in the nuts.

Why not do it gradually, take 10% everytime we get a good month?

Shouldn't take long due to the great abilities of the management and superb skills of the IT staff we are paying for, right?

Right?

[evoorhees]

Doing in gradually, with 10 or 25% of profits going to the reserve fund seems much more reasonable to me, rather than doing it all at once. Is this where the problem is, that the contract says 100% of profits go to dividends? Couldn't you just list it as an expense to pay off the loan which gets taken out before profits are calculated?

Sure, it could be done gradually such that a % of earnings each month go to building up the pool. I'd rather just get it over with, do one single month without dividends and then problem solved.

"I'd rather ..." yeah, that is what would be good for you, but as the manager of SatoshiDice you have the responsibility to do what would be good for the shareholders. Seems there is a conflict of interest here.

Of course. But the math is as follows - 3-4k BTC needs to be retained in order to create an asset betting pool for SD. If not, then I have a personal loan to SD indefinitely.

The only conflict of interest here is that I was being extremely generous about letting SD use that money for free, and now I need to go back to being normal, and establish a betting pool for SD with its own funds.

Strictly speaking, in the narrowest interest of an s.dice shareholder, Erik (me) should continue to loan the 6100 btc to the site forever, for free. But sorry, I'm not going to do that. Anyone have a good suggestion if my plan is so terrible?

[nimda]

nimda... why would you think the revenue from sold shares would be property of SD? They were my shares, which I sold, thus the BTC from that sale is mine, not the company's.  

Eh, I was wrong.
Doesn't affect me as a non-shareholder though.

Why is this contentious?

Because it's sudden.

[evoorhees]

The thing that irks me is the surprise of it all.  Shares are down and we finally get a good month, and this announcement is a bit of a kick in the nuts.

Why not do it gradually, take 10% everytime we get a good month?

Shouldn't take long due to the great abilities of the management and superb skills of the IT staff we are paying for, right?

Right?

Well the thing about suprises is that there is no way for me to announce something without it being a surprise upon announcement, no? How can I convey new information to the community without it being the first time they've heard it? I'm trying to give people a heads up, and make the announcement 2-3 weeks before the end of the month.

Again, it could be done gradually... I'm just the "rip the bandaid off quickly" type of person. Really, this has been a massive free loan to SD shareholders. I'd like to end the loan because it's been bothering me since BTC went up 10x, so solving the issue with one month of earnings seems ideal. Again, 87% of those dividends would've been going to me and my partner anyway, so I won't be getting dividends this month either.

[Yogafan00000]

...like to end the loan because it's been bothering me since BTC went up 10x...

From our point of view, I would say that it's convenient since BTC went up 10x.

[RationalSpeculator]

Better a quick pain than a long drain. I understand some shareholders are disappointed as they will not have a dividend this month. And if you wanted to sell out soon than this is bad news. But if you are in it for a longer term I think a 10% drag on earnings for 6 months will likely have a bigger negative impact on the value of the shares than just doing it in one month.

Bad news comes all together. Sdice has had it's share. The sentiment here is like bitcoin in 2011: very negative. I think we are bottoming out.

[evoorhees]

The thing that irks me is the surprise of it all.  Shares are down and we finally get a good month, and this announcement is a bit of a kick in the nuts.

Why not do it gradually, take 10% everytime we get a good month?

Shouldn't take long due to the great abilities of the management and superb skills of the IT staff we are paying for, right?

Right?

Well the thing about suprises is that there is no way for me to announce something without it being a surprise upon announcement, no? How can I convey new information to the community without it being the first time they've heard it? I'm trying to give people a heads up, and make the announcement 2-3 weeks before the end of the month.

Again, it could be done gradually... I'm just the "rip the bandaid off quickly" type of person. Really, this has been a massive free loan to SD shareholders. I'd like to end the loan because it's been bothering me since BTC went up 10x, so solving the issue with one month of earnings seems ideal. Again, 87% of those dividends would've been going to me and my partner anyway, so I won't be getting dividends this month either.

To be honest, this should have been made clear from day one.

After all what is going to stop you from saying BTW I made a loan to s.dice for 1,000,000 BTC.

Yeah accounting does suck but no one will ever trust you evar again.

I can't claim a loan to s.dice for 1,000,000 btc. The 6,100 actually exists in SD's wallets. So when I withdraw that, SD won't have lost money... it simply won't have a big betting pool any more. If I tried to claim some illegitimate loan, then when I withdraw it back to me, it will come from.... where? It wouldn't be real, thus an obvious lie.

So that's not a good comparison but I understand what you are saying.