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Author Topic: [Havelock][KCIM] Korb Investments – Establishing my Investment Firm, part 1  (Read 30646 times)
enygma
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May 23, 2014, 07:14:13 PM
 #181

PM sent. For the record, I am the largest single shareholder in this fund that I'm aware of. Not happy with the situation, but I well understand that too many factors were involved that didn't go our way, going back to BFL delays, the sudden spike in the value of BTC after hardware purchases, and rampant network growth.

Obligatory "Donate to" vanity address:

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Transactions can optionally carry transaction fees. Whoever mines the block which ends up containing your transaction will get the fee. The Bitcoin client will sometimes force you to pay a fee when it thinks that no miner will accept your transaction otherwise.
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Korbman
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May 23, 2014, 08:12:25 PM
 #182

I'm not (and have not been) a KCIM shareholder/investor, but I'd like to commend you on how you're handling this.

The trade-stop, the detailed explanation of the current environment, and the solicitation of comments from the shareholders all speak to your professionalism.

I appreciate that, thank you.

PM sent. For the record, I am the largest single shareholder in this fund that I'm aware of. Not happy with the situation, but I well understand that too many factors were involved that didn't go our way, going back to BFL delays, the sudden spike in the value of BTC after hardware purchases, and rampant network growth.

Reply sent!


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May 24, 2014, 01:38:17 AM
 #183

Quite a minor shareholder, but thanks for the honest and open post! As others have said you've handled it very professionally
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May 24, 2014, 02:07:58 AM
 #184

I am a shareholder, and a miner. I can relate to everything, as I too have decided to liquidate my mining assets. In my case, it was delays from both BFL and HashFast.

I did not renew my membership with the Bitcoin Foundation, this month, either. I don't like the direction Bitcoin is headed in the US. Mining now belongs to the wealthy.

I don't believe that Satoshi would be pleased.

--Doogie
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May 25, 2014, 12:48:46 AM
 #185

Hi All,

Thank you for your responses and comments thus far, and to those of you who sent me a PM or email I'll be getting back to you shortly (still playing a bit of catch-up).

A survey link will be released tonight and again tomorrow (via Havelock) so I can get a feel for where everyone stands, similar to the way I handled the restructuring back in December. A reminder to submit your vote will go out again on the 27th and 29th, with a final tally being taken on the 30th prior to trading reopening.

Just so everyone is aware, this is not a forced liquidation, instead it's merely a suggestion based on where I think the network is going. With that in mind, proceeding down this road leaves us with options besides simply selling off all mining equipment. Another option, as wisely pointed out by a knowledgeable investor, would be to sell the fund in its entirety (including all equipment) as a going concern to an individual or organization that has the available resources to push forward.

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May 25, 2014, 04:59:56 AM
 #186

Unfortunate turn of events indeed. I do have two concerns about the fund operation and it's ending.

1. More curiosity than concern but did you only mine BTC during fund operations? I noticed several mining funds or ventures that did not end well citing the difficulty of BTC being a major factor but being someone who mines as well I know that just pointing your miner at a BTC pool won't be enough to make good profit. There are some alt coins that beat out BTC when mined and sold on exchanges. Also, did you (with prior notification and approval, of course) ever consider setting aside some of the mined proceeds to trade with? Obviously this would take some time and might even require an extra employee with trading experience but if I only relied on mined proceeds I would have never paid my miners off in a reasonable amount of time. I'm just curious since most mining concerns as described sound like they only mine BTC alone and dump it into USD as soon as they get it. If it is decided to continue operations perhaps this is something to consider.

2. In terms of the Dissolution Clause via Havelock. In the Dissolution Clause it states "all mining equipment will be auctioned to the highest bidder(s). Proceeds from the sale, in conjunction with any remaining funds, will be distributed to all investors as a Final Dividend." If it comes to that for future reference how will all that be handled?

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May 25, 2014, 04:04:45 PM
 #187

Unfortunate turn of events indeed. I do have two concerns about the fund operation and it's ending.

1. More curiosity than concern but did you only mine BTC during fund operations? I noticed several mining funds or ventures that did not end well citing the difficulty of BTC being a major factor but being someone who mines as well I know that just pointing your miner at a BTC pool won't be enough to make good profit. There are some alt coins that beat out BTC when mined and sold on exchanges.

Ignoring how profitable another coin may be, mining Bitcoin was our only focus with the equipment. Introducing additional mining and exchange risk by trying to profit from other coins would have been irresponsible and reckless, regardless of how lucrative.

Also, did you (with prior notification and approval, of course) ever consider setting aside some of the mined proceeds to trade with? Obviously this would take some time and might even require an extra employee with trading experience but if I only relied on mined proceeds I would have never paid my miners off in a reasonable amount of time. I'm just curious since most mining concerns as described sound like they only mine BTC alone and dump it into USD as soon as they get it. If it is decided to continue operations perhaps this is something to consider.

No. Any revenue from mining was used to cover expenses and set aside for reinvestment / dividends. Trading with mining proceeds *is* akin to gambling in this market, and also incredible unprofessional and irresponsible.

2. In terms of the Dissolution Clause via Havelock. In the Dissolution Clause it states "all mining equipment will be auctioned to the highest bidder(s). Proceeds from the sale, in conjunction with any remaining funds, will be distributed to all investors as a Final Dividend." If it comes to that for future reference how will all that be handled?

Should dissolution be agreed upon, the next step would be to determine how to dissolve the company. I'd likely determine if there are any immediate interested parties for the entire asset (which includes the equipment, Havelock listing, and investor base), as it's easier to sell everything to one person / organization than to sell everything bit-by-bit. If no one is interested in taking up the reins, the next step would be to find any interested buyers for the hardware and slowly sell off each one.

During that time, mining will continue as normal, but bi-weekly dividends likely would not. The final dividend would be distributed once all hardware is sold and any internal processes are concluded. This dividend would be a culmination of all mining revenue during the liquidation period, proceeds from the sale of hardware, our reinvestment fund, and any remaining fund reserves I had set aside.

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May 28, 2014, 05:48:17 PM
 #188

I’ve been receiving a fair amount of feedback thus far, which is always helpful. I wanted to take a moment to address a few questions and suggestions that have been repeated a few times.

Quote
•   Postpone dividends and put a heavier focus on reinvestment in new hardware.

While this would be a short-term and aggressive solution, it does present two primary concerns:
1)   If the calculations show that, even under optimistic circumstances, hardware purchased at price “X” isn’t able to recoup that cost “X”, is it really worth it to make the purchase in the first place?
2)   A change like this would require a vote, and one that would more than likely fail because it doesn’t present itself as a viable long-term solution to a perpetual problem.


Quote
•   Stick it out and wait for the Bitcoin price to increase.

Unfortunately, gambling on when the BTC/USD exchange rate will go up isn't a practical long-term, or short-term, business model.

In order for us to grow in any substantial capacity (speaking solely to datacenter space and hardware purchases), the exchange rate would need to be above $750 per BTC. That price would give us the ability to increase our hashrate by 50%, datacenter space by 100%, and cover energy costs associated with adding another 20A circuit.

While it’s always a pleasure to see the exchange rate rise, we know it can also fall. It’s better to be realistic about the situation rather than hopeful, which is a hard lesson I’ve learned in years past.


Quote
•   Are your ambitions as big as PETA’s?

I have some daunting ambitions, certainly, but we don’t have the capital resources (by a long shot) to grow even one hundredth of their size. Hosting space, energy costs, and time are also major preventative factors.


Quote
•   Sell all hardware and use the proceeds to purchase new, more efficient devices.

Mining something is better than mining nothing. I won’t even touch on the pain and aggravation we would experience if we had to sit through another preorder queue. Foregoing that would mean purchasing hardware that is available now, which, in terms of efficiency, is on par with what we’re already using.


Quote
•   What will happen to my shares if liquidation should occur?

Shares are left untouched in this process, and can still be traded when the KCIM market resumes. The last dividend will be paid out on a ‘per share’ basis and will be distributed after all equipment has been sold and funds are accounted for. At that point, trading will again be halted, and a summary of all assets and final dividend will be posted.

Once the dividend is paid and outstanding issues are resolved, the fund would be permanently closed.


Quote
•   What do you estimate the final dividend to be?

Assuming full liquidation, the final dividend will be comprised of all remaining mining revenue, leftover funding from the previous model, our reinvestment fund, proceeds from the sale of all equipment, and any remaining Namecoins mined on BTCGuild. It’s hard to say what this value will be, but I estimate it to be anywhere from BTC20-30 (0.00023 – 0.00035 per share, 10x more than a normal dividend).

Theoretically, selling the entire operation as is should net a bit more than that as there is value in A) already having a listing on Havelock and B) having an established investor base. A motivated individual or organization looking to build a mining farm would have the framework in place by buying us out instead of starting from scratch.

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May 30, 2014, 12:16:09 AM
 #189

Voting has ended and the results have been compiled.

Raw results (email addresses have been obfuscated for security): https://docs.google.com/spreadsheets/d/16OV0X2RN2-0bGPeI348Xg-e6NLf7ywSCp8DAIYl4Vrs/edit#gid=1611567700

Are you in favor of KCIM ceasing company operations (resulting in a sale of the asset or liquidation)?:
55287 -- Yes
8926   -- No
22687 -- Abstained


There's been quite a bit of feedback overall, some of which has been addressed above. It's been a mix of complements, understandable disappointment, insults and anger. Not to mention an assortment of suggestions from investors that I fear may be missing the forest for the trees, so to speak. Given the circumstances, I don't imagine this process could have gone any smoother.


Trading will resume tomorrow at 12PM (Havelock time), and the order book has been cleared. For the next several weeks, the immediate goal is to find a party interested in purchasing the entire asset outright. If you know someone like this, feel free to have them contact me and we'll take it from there.

Should no one come forward, the subsequent step would be to sell the hardware to anyone interested (of which a few people have come forward already). Any Unit Holder will have the ability to partake in an 'assets for equity' deal if they so choose.

What this means is, if you would like to run a device yourself, you could purchase it from the company using your current holdings (and/or Bitcoins, as necessary). For example, if a mining rig is being sold for BTC1.0, and the last dividend paid to you is worth BTC2.0, you can elect to receive the rig and the difference in the dividend (BTC1.0). The opposite is viable as well; say the rig is worth BTC2.0 and your last dividend is worth BTC1.0. You can purchase the rig for the difference; BTC1.0.

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May 30, 2014, 12:32:29 AM
 #190

Well that vote made it pretty clear what the shareholder sentiment is
Thanks for clarifying where will the fund go now that the vote has been decided, and for the professionalism which is rare in the Bitcoin securities realm.
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June 16, 2014, 01:45:18 AM
 #191

Recent Update:

To all interested parties,

We currently have several miners up for sale right now:
-- 2 x CoinTerra TerraMiner IVs [1.6TH/s, 2kW)
-- 1 x KnC Jupiter October edition, one upgraded board (~575GH/s, 560W)

One AntMiner has been sold already, and the other is on reserve. I've also had one person come forward for a CoinTerra unit, though I haven't heard back from them yet.

Anyone interested in purchasing a miner should get in touch with me either via email, forums, or IRC. I price all equipment competitively.

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June 27, 2014, 12:21:16 PM
 #192

Hi All,

Trading will once again be halted this afternoon at 3PM EDT. We'll be going over some final updates, payment schedules, closing statements after then.

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June 27, 2014, 09:13:07 PM
 #193

Since trading is closed, my liquidation value guess is going to be somewhere around .00018
Korbman
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June 28, 2014, 01:11:39 AM
 #194

Hello everyone!

All equipment has been sold and so far the new owners are happy with their purchases, which is something I strive for. All cash purchases are visible from our public 'reinvestment' address. Some of you may have noticed that our outstanding shares have decreased as well. This is the result of some holders trading their shares for equipment.

Since trading is closed, my liquidation value guess is going to be somewhere around .00018

Maaayyyybeeeee...



Sorry, I promise I have a sense of humor sometimes.  Cheesy

0.00018 is close, but too low since you don't know how much is left in the KCIM reserves.  Wink

Last I just quickly tallied, the dividend comes in at ~0.00025 per share (or thereabout). I converted our stockpiled Namecoins, which helped to give us a tiny boost as well. I'll have the final number tomorrow (after accounting for transfer fees...which obviously aren't much) when I combine all funds into the my Havelock manager's account for payout.

With the final dividend going out tomorrow morning, the plan at this point is to completely cease operations by the 30th (delisting that day, or shortly after depending on Havelock). I'll post my closing statements on the 29th.

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June 28, 2014, 01:44:20 AM
 #195

Since trading is closed, my liquidation value guess is going to be somewhere around .00018

Maaayyyybeeeee...



Sorry, I promise I have a sense of humor sometimes.  Cheesy

0.00018 is close, but too low since you don't know how much is left in the KCIM reserves.  Wink

Dang! I was wondering, but didn't take the time to calculate a good guess for that. No one hit my bids early on, so it was just a guess!  Grin
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June 28, 2014, 01:51:16 AM
 #196

Hello everyone!

All equipment has been sold and so far the new owners are happy with their purchases, which is something I strive for. All cash purchases are visible from our public 'reinvestment' address. Some of you may have noticed that our outstanding shares have decreased as well. This is the result of some holders trading their shares for equipment.

Since trading is closed, my liquidation value guess is going to be somewhere around .00018

Last I just quickly tallied, the dividend comes in at ~0.00025 per share (or thereabout). I converted our stockpiled Namecoins, which helped to give us a tiny boost as well. I'll have the final number tomorrow (after accounting for transfer fees...which obviously aren't much) when I combine all funds into the my Havelock manager's account for payout.

With the final dividend going out tomorrow morning, the plan at this point is to completely cease operations by the 30th (delisting that day, or shortly after depending on Havelock). I'll post my closing statements on the 29th.

The market was close on that one closing value of 0.0029
Well a good run for this investment all things including BFL considered ^_^
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June 28, 2014, 11:48:36 PM
 #197

Last dividend recieved it was an interesting ride and one of the original havelock securities.
Darn BFL Labs
Anyways the end of an era adieu Korb Investments and props to Korb for his persistence even with bad luck.
Korbman
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June 29, 2014, 08:24:28 PM
 #198

Closing Statements:

It’s been a time consuming and turbulent two years for this operation, but the time has come for us to close down. There were a number of factors contributing to our decline, from vast hardware delays to a rapidly rising exchange rate.

The game we play is a vicious one, and mining power will continue to concentrate among those with the resources to maintain it. Other farms have fallen before us, and more will fall after. It’s unfortunate I was unable to make this work, costing us more than we’d like to think about.

I’ve thought over our past actions and mistakes, trying to find out where we could have done better. The reality is, there wasn’t much on this front. We had hosting space provisioned, we had energy costs covered, and there wasn’t anything I could do about when we received any ordered hardware. The single largest oversight on my end was a gross underestimation on the growth of the network during 2013, leading to waiting on our orders from Butterfly Labs instead of continuing to purchase hardware from other vendors early on. This lies with me.

On another note, I recognize and appreciate the praises for my communication skills. It’s my hope that other managers will follow in my example.

As all remaining funds have been distributed as a final dividend, I’ve contacted Havelock to pull our listing on July 1st, and once that’s down I will also be closing this thread. If anyone is interested in a collaborative discussion, project advice, or even general inquiries, feel free to contact me via PM or email. I’m more than happy to talk about anything on your mind.

Best,
-Andrew

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