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

[Deprived]

What puzzles me is this:

From the S.DICE prospectus (referring to issuance of further shares):

"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 "

Was the 1 day average price on MPEX REALLY .0044 or less?

NO.

The prospectus contained a clause specifically to avoid this.  I presume MPEx will now delist S.DICE for breaking its contract.  GG all.

[totaleclipseofthebank]

What puzzles me is this:

From the S.DICE prospectus (referring to issuance of further shares):

"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 "

Was the 1 day average price on MPEX REALLY .0044 or less?

NO.

The prospectus contained a clause specifically to avoid this.  I presume MPEx will now delist S.DICE for breaking its contract.  GG all.

*rolls a 1 on SD*

EDIT: but seriously this is a pretty obvious breach of contract in that case
EDIT2: Actually it isn't, since no new shares were issued. Really all that happens is evoorhees is selling his own shares on the market which he is perfectly entitled to do. This part of the contract refers to *new* shares only.

[Bowjob]

What puzzles me is this:

From the S.DICE prospectus (referring to issuance of further shares):

"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 "

Was the 1 day average price on MPEX REALLY .0044 or less?

NO.

The prospectus contained a clause specifically to avoid this.  I presume MPEx will now delist S.DICE for breaking its contract.  GG all.

Shit. now I'm confused

[Deprived]

Well it's about as serious a breach of contract as you can get - underselling the market when the contract specifically prevents you from doing so to any significant extent.  It'll be interesting to see how MPEx handle this - on the one hand they obviously don't want to lose an otherwise excellent investment such as S.DICE.  But on the other side of the coin they can't really allow issuers to blatantly break their contract if they intend to continue to be taken seriously.

[ThickAsThieves]

I think you misunderstand. He did not add more shares. The prospectus notes 100mil shares, he has only listed, what, 11mil after this?

(a)The representatives of SatoshiDice have elected to divide SatoshiDice into 100`000`000 (one hundred million) equal non-voting shares with a total equity value of 10`000 BTC (0.0001 BTC each). In the event of liquidation or breach of this Agreement they solemnly promise and warrant to repay all investors holding shares at this minimum value. 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 ;

[Deprived]

I think you misunderstand. He did not add more shares. The prospectus notes 100mil shares, he has only listed, what, 11mil after this?

You need to read it in context:

"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 ; "

Creating new shares would automatically dilute existing investors - and is thus totally banned.

The sentence defining pricing therefore makes so sense if it were to refer to the pricing of something which is explicitly banned.

I DO agree that the wording is a bit ambiguous - but when there's two things it could refer to (creating new shares and selling additional shares) and one of them (creating new shares) is explicitly forbidden then it lofically MUST refer to the other (selling additional shares).

[ThickAsThieves]

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.

This isn't dilution, all shares are still equal parts of the company. It's devaluation, sure, but is it dilution?

[DeaDTerra]

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.

This isn't dilution, all shares are still equal parts of the company. It's devaluation, sure, but is it dilution?

If we value the shares for the assets behind the shares and the potential for them to make profit then there should be no concern with that Erik sells off more of his private shares as each share still represents the same % of S.DICE hence the backing of the share is the same.
Though if you were looking to speculate and you wanted the price to increase, I understand why you are angry, but that's speculation and it's always a risk.

I think this was a bit sudden though and I would have preferred it with warning, as I woke up by tons of buy orders which are now over priced and I bought tons of shares yesterday so I now don't have any BTC to send to mpex...
//DeaDTerra

[Deprived]

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.

This isn't dilution, all shares are still equal parts of the company. It's devaluation, sure, but is it dilution?

No it's not dilution - I never claimed it was.

That sentence prevents dilution.  The second one prevented devaluation.

I guess the interpretation of the contract depends on whether the 100 million shares are considered to be authorised or issued.  As the contract makes no mention of allocation of the 90 million not sold in initial offering I would interpret them as having been authorised not issued - which then makes the second sentence (referring to pricing) actually relevant.  There was no point issuing the other 90 million as the shares don't give ownership of S.Dice and its retained earnings - just entitlement to a portion of profit stream.

100 million shares were authorised, each entitled to 1/100 millionth of profits but not owning equity.  10 million were issued initially.

If you disagree with that then what shares does "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" restrict the price of?

[Bowjob]

Can anyone explain this to me?

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 bolded part, I get it. They promise not to dilute shareholders. But the second sentence is talking about how they would release new shares. I was under the impression that "share issuance" means releasing shares to the public. Am I missing something? If the bolded sentence mean that they won't dilute the holders, then what's the point of the second sentence?

[ThickAsThieves]

Can anyone explain this to me?

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 bolded part, I get it. They promise not to dilute shareholders. But the second sentence is talking about how they would release new shares. I was under the impression that "share issuance" means releasing shares to the public. Am I missing something? If the bolded sentence mean that they won't dilute the holders, then what's the point of the second sentence?

Yep, I give up. It gets very muddy, but it's still possible he always intended to slowly release shares... I dunno...

[ColdHardMetal]

never to issue more shares on any other venue

Doesn't say anything about not issuing more shares on MPEX, just that they won't do it on another platform.

[totaleclipseofthebank]

Definition of 'Issued Shares'
The number of authorized shares that is sold to and held by the shareholders of a company, regardless of whether they are insiders, institutional investors or the general public.

Also known as "issued stock."
Investopedia Says    
Investopedia explains 'Issued Shares'
Issued shares include the stock that a company sells publicly in order to generate capital and the stock given to insiders as part of their compensation packages. Unlike shares that are held as treasury stock, shares that have been retired are not included in this figure. The amount of issued shares can be all or part of the total amount of authorized shares of a corporation.

The total number of issued shares outstanding in a company is most often shown in the annual report.

Read more: http://www.investopedia.com/terms/i/issuedshares.asp#ixzz2K0OSUe4o

so no new shares were issued, only put on the market by the current owner, evoorhees.

If someone thinks the price should be higher, they should simply buy evoorhees's shares and put them back on the market at a higher price. Too bad mpex charges such a ridiculous fee to open an account...

[Deprived]

Can anyone explain this to me?

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 bolded part, I get it. They promise not to dilute shareholders. But the second sentence is talking about how they would release new shares. I was under the impression that "share issuance" means releasing shares to the public. Am I missing something? If the bolded sentence mean that they won't dilute the holders, then what's the point of the second sentence?

The second sentence refers to releasing more shares on MPEx - what just happened.

100 million shares were authorised, only 10 million were issued.  The second sentence defined the price as which new shares have to be sold - which is what just got broken.

The issued 10 million represent entitlement to a share of profit - not ownership, which is why not all 90 million had to be issued at once.  Note that even IF the 90 million were considered to be treasury shares (which are considered in general to be issued as well as authorised) they had ABSOLUTELY NOT been issued on MPEx - and the sentence of relevance refers very clearly to issuance on MPEx as opposed to issuance elsewhere.

If anyone can define any other "share issuance" whose price is restricted by the contract AND is possible under the contract then go for it - but prior to this there were 10 million share issued on MPEx and now there's more.  That's as clear a case of issuing shares as you can get - and the pricing of them a blatant breach of the contract.

[Deprived]

Definition of 'Issued Shares'
The number of authorized shares that is sold to and held by the shareholders of a company, regardless of whether they are insiders, institutional investors or the general public.

Also known as "issued stock."
Investopedia Says    
Investopedia explains 'Issued Shares'
Issued shares include the stock that a company sells publicly in order to generate capital and the stock given to insiders as part of their compensation packages. Unlike shares that are held as treasury stock, shares that have been retired are not included in this figure. The amount of issued shares can be all or part of the total amount of authorized shares of a corporation.

The total number of issued shares outstanding in a company is most often shown in the annual report.

Read more: http://www.investopedia.com/terms/i/issuedshares.asp#ixzz2K0OSUe4o

so no new shares were issued, only put on the market by the current owner, evoorhees.

Wrong.  Only 10 million shares were issued on MPEx prior to this.  This issues new shares on MPEx.

The company could privately sell a portion of the company off-exchange at whatever price it wanted (it's barred from issuing/selling shares on another exchange) - but if it did so by issuing more shares on MPEx the contract applies defining a minimum price.

[Bowjob]

MPEX Rota anyone?  

[ThickAsThieves]

Just thinking out loud, but are we sure he didn't already own a million shares and simply sell them cheaply? Or, is there a way to check the total current share count on MPEX?

[Bowjob]

Just thinking out loud, but are we sure he didn't already own a million shares and simply sell them cheaply? Or, is there a way to check the total current share count on MPEX?

Those shares aren't necessarily his own shares. It could be off of a private investor.

[20:42] <evoorhees> Bowjob - I have one or two or three private people who own stakes. This 5% isn't necessarily from my share.

[ThickAsThieves]

So, he could say, sell a few million of his private shares to an investor that owns a million MPEX shares in an arrangement to have him sell them off MPEX? This would circumvent the "rules", but in that case he wouldn't need to announce anything at all...

[Deprived]

Just thinking out loud, but are we sure he didn't already own a million shares and simply sell them cheaply? Or, is there a way to check the total current share count on MPEX?

Those shares aren't necessarily his own shares. It could be off of a private investor.

[20:42] <evoorhees> Bowjob - I have one or two or three private people who own stakes. This 5% isn't necessarily from my share.

Doesn't matter whose they are - they're freshly issued shares on MPEx.

Having private investors who owned equity off of MPEx was entirely valid under the contract.  But the contract specifically defines the minimum price at which they have to be sold if they're issued on MPEx - and only the original asset issuer can actually issue new shares on MPEx.  In theory a private owner of equity could create their own security backed by the portion they own of S.DICE off-site but then it wouldn't be part of the same security (and would presumably be valued lower due to extra counter-party risk).

Someone (whether evoorhees or a private stake-holder I can't tell) wanted cash in a rush and decided to run over the contract to get it.

Note that if there's a private stakeholder, evorhees CAN'T just create new shares in MPEx and transfer the shares to them (then they sell at whatever price they want) as the issuance has to be made in accordance with "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 ; ".  And any creation of new shares in the MPEx offering IS an issuance - it's precisely what issuing is.