[BTC-TC] BTC-Trading Pass-Through Fund (BTC-TRADING-PT) is closed

[hl5460]

In a continuing effort to increase the liquidity (and decrease the spread) of BTC-TRADING-PT shares. I am considering a 10-for-1 stock split. I would like to get some feedback on the idea.

Basically, a stock split would work like this: for every share a person owns, they would receive 9 additional shares. They would now own 10 times as many shares, so each share would be worth 1/10th as much. In addition, each share would receive proportionally less dividends. In the end, there would be no change in the value to shareholders. It would be like holding 10 dimes instead of 1 dollar.

Currently, the value of a share is about $30 (up from $1.80 in December, woo hoo!), so buying or selling shares must be done in $30 increments, which is too high for many people. A 10-for-1 stock split would reduce the increment to about $3, making it easier to buy and sell.

The stock split would not affect fees because fees are based on total value rather than number of shares.

Any opinions?

+1 split share would be a good idea to increase liquidity.

[JohnGalt]

I assume both 100x walls are from you. May I ask, why?

Yes. The walls are there to provide liquidity. I want to make sure that there is always someone to buy or sell shares. Normally, the walls are placed near the bid and ask prices of LTC-GLOBAL (the underlying asset), but I have reduced the spread somewhat in a recent attempt to jump-start the market. Read this post: https://bitcointalk.org/index.php?topic=131891.msg2391256#msg2391256

[greatscott]

Soooooooo, any updates on the split? Things seem to be getting... pricey.

[JohnGalt]

Soooooooo, any updates on the split? Things seem to getting... pricey.

I agree.  The response has been 100% positive, so I am definitely going to do the split as soon as possible. There are some logistics involved, and I am working on them. I don't have a date yet, but I intend to do a 100:1 split. I will provide more information when I do the monthly update (which will come out after LTC-GLOBAL pays its dividend).

[gen. specific]

Any breakdown of the finances of this security?

Its based on trade volume essentially yes and listing fees

[JohnGalt]

Any breakdown of the finances of this security?

Its based on trade volume essentially yes and listing fees

Here's a quick summary:

Technically, this security is a exchanged-traded mutual fund that holds shares of BTC TRADING Corp. (listed as LTC-GLOBAL on the LTC-GLOBAL exchange). The values of the fund and its shares depend on the value of the BTC TRADING Corp. shares that the fund holds. This fund pays a dividend around the beginning of each month. All dividends paid to the fund by BTC TRADING Corp. are distributed to fund shareholders. Normally BTC TRADING Corp. pays a dividend once each month around the beginning of the month, and the fund's dividend, which is based on that, is paid shortly afterword. I charge a fee of 1% of assets per year, paid monthly from the BTC TRADING Corp. dividend.

All the details are explained in the first post in this thread and in the BTC-TRADING-PT Details page on BTC-TC.

Now, I think your questions really pertain to BTC TRADING Corp.

BTC TRADING Corp. runs two exchanges: LTC-GLOBAL and BTC-TC. The exchanges are very similar, but one is denominated in BTC and the other is denominated in LTC. LTC-GLOBAL is the original, but BTC-TC has become much bigger than LTC-GLOBAL. Both exchanges make money by charging fees. The major fee is the trading fee which is charged whenever a person buys or sells shares. The fee is 0.25% of the sale. The other fee is the listing fee which is a fee for listing a security on the exchange. This fee is currently either 5 BTC or 150 LTC. I don't believe there are any other sources of revenue.

Net income generated by the business is distributed as dividends once per month after the end of the month to all shareholders. Burnside also publishes financial information at that time in this thread: https://forum.litecoin.net/index.php/topic,551.0.html

Finally, there are 10,000 shares of LTC-GLOBAL. This fund owns 100 of them or 1%. It has owned more than that in the past. While 1% is a small amount, I believe that burnside  owns 90%-95%, so it is likely that this fund is one of the largest shareholders.

[Lohoris]

The fee is 0.25% of the sale.

Unless I'm mistaken, it's 0.2~0.25% both sides, for a total of 0.4~0.5%; it's 0.2% if you have 2FA on, and 0.25% otherwise.

[Keven]

The fee is 0.25% of the sale.

Unless I'm mistaken, it's 0.2~0.25% both sides, for a total of 0.4~0.5%; it's 0.2% if you have 2FA on, and 0.25% otherwise.

0.2% of the sale and buy is my fee.Not only cost sale fee.

[JohnGalt]

Monthly Report
June 2013

July 3, 2013

Overview

Asset Information
Assets: 100 shares of LTC-GLOBAL
Shares Outstanding: 1000
NAV (per share): 0.82953 (based on the LTC-GLOBAL 7 day average price of 260.86 LTC)

Dividend Information
Dividend (paid 2013-7-3): 2.51453 BTC
Dividend per share: .00251453 BTC
Monthly Yield (based on NAV): 0.30%
Annualized Yield: 3.64%

Management Fee
Normal Fee (0.08333% of asset value): 21.74 LTC
Waived: 0
Fee Paid: 21.74 LTC

Detailed information can be found here: https://docs.google.com/spreadsheet/ccc?key=0Am3m7aRNI-JbdElvTTc5Vmg3bUh2WDAwc2tsLU1JcEE

Commentary

The price of LTC-GLOBAL shares has nearly doubled in the last month. I believe this is due to the fact that the exchange has grown a lot both in terms of the number of assets, the total value of all assets, and the transaction volume. The 7-day average price rose from 155.81 LTC to 260.86 LTC. Trading volumes of both LTC-GLOBAL and BTC-TRADING-PT continue to be low, but higher than before.

LTC-GLOBAL paid a monthly dividend of 98.32 LTC. After subtracting the management fee and converting to BTC, the fund earned an income of 2.51453 BTC (0.00251453 BTC per share) that was distributed on July 3, 2013.

Please note that the NAV is only an estimation of the value of the shares. The trading volumes of both LTC-GLOBAL and BTC-TRADING-PT are low and the bid-ask spreads are very high, so the actual price of a share can vary quite a bit.

Voting

Motions must pass by a margin of 100 shares to be approved (a YES vote), or fail by a margin of 100 shares to not be approved (a NO vote). Votes with a margin of less than 100 shares receive an ABSTAIN vote. The results of motions that receive less than 200 votes will not be considered valid. At this time, voting for approval is only done for IPOs due to the lack of shares publicly held. Please vote. It is very important for the success of the exchanges and for the value of your shares.

Please note the earlier deadlines for IPOs. Voting on IPOs ends sooner than established securities because trading on a security cannot begin until the security is approved.

Voting for approval of assets has been temporarily suspended due to lack of participation. However, in the next few days we will be voting to find out how many people would like to resume voting for asset approval. If a sufficient number vote to resume, then I will resume weekly voting on assets.

Other Important Information

I act as a market-maker in BTC-TRADING-PT. The goal to to ensure that there are always shares to buy and always someone to sell to, both at reasonable prices. Normally, I set the bid and ask prices to match the bid and ask prices of LTC-GLOBAL, but in the past few weeks I have been pricing bids and asks aggressively, attempting to narrow the spread and increase liquidity of the shares. I have also been acting as a market-maker in LTC-GLOBAL shares, but to a lesser extent. I believe that both these activities have increased the trading volume for both shares and also have contributed to the rise in values of both shares. I plan to continue this activity for the foreseeable future.

A few weeks ago, I proposed splitting BTC-TRADING-PT shares 100:1 as a way to increase liquidity and make it easier for people to buy and sell shares. The response was 100% positive so I am going ahead with the plan. I don't have a schedule at this time. Doing the split will take some coordination with burnside, and some effort on his part. When there is a date, I will make an announcement.

[JohnGalt]

Update

July 6, 2013

Regarding the proposed 100:1 split of BTC-TRADING-PT:

A few weeks ago, I proposed splitting BTC-TRADING-PT shares 100:1 as a way to increase liquidity and make it easier for people to buy and sell shares. The response was 100% positive so I am going ahead with the plan. I don't have a schedule at this time. Doing the split will take some coordination with burnside, and some effort on his part. When there is a date, I will make an announcement.

In the LTC-GLOBAL June Financial Summary, burnside notified everyone that he is in the process of splitting LTC-GLOBAL 100:1. The current plan is to synchronize the split of both securities in order to reduce any confusion or disruption. Both securities are splitting 100:1, so BTC-TRADING-PT shares will continue to represent 1/10th of a LTC-GLOBAL share after the split.

June 2013 Financial Summary
...
- We are currently working on paperwork to split the stock 100x.  Hopefully more news on that soon.

[Lohoris]

Both securities are splitting 100:1, so BTC-TRADING-PT shares will continue to represent 1/10th of a LTC-GLOBAL share after the split.

Oh, this is... bizarre.

Is there a reason why while he was at it, he didn't sync them, so that they would become 1:1?

[JohnGalt]

Both securities are splitting 100:1, so BTC-TRADING-PT shares will continue to represent 1/10th of a LTC-GLOBAL share after the split.

Oh, this is... bizarre.

Is there a reason why while he was at it, he didn't sync them, so that they would become 1:1?

After LTC-GLOBAL splits 100:1, each share is worth $6 - $7, and I would prefer them to be even cheaper. That is why I planned to maintain their 1/10th share value.

I considered splitting BTC-TRADING-PT shares only 10:1 so that they have the same value. That might be less confusing to investors. Is that what you are thinking?

Perhaps a better solution is for LTC-GLOBAL to split 1000:1 and BTC-TRADING-PT to split 100:1, making both shares have the same value -- $0.60 -$0.70 at current prices.

[canth]

Both securities are splitting 100:1, so BTC-TRADING-PT shares will continue to represent 1/10th of a LTC-GLOBAL share after the split.

Oh, this is... bizarre.

Is there a reason why while he was at it, he didn't sync them, so that they would become 1:1?

After LTC-GLOBAL splits 100:1, each share is worth $6 - $7, and I would prefer them to be even cheaper. That is why I planned to maintain their 1/10th share value.

I considered splitting BTC-TRADING-PT shares only 10:1 so that they have the same value. That might be less confusing to investors. Is that what you are thinking?

Perhaps a better solution is for LTC-GLOBAL to split 1000:1 and BTC-TRADING-PT to split 100:1, making both shares have the same value -- $0.60 -$0.70 at current prices.

I'd vote for the last option - makes the math simpler. If LTC-GLOBAL does split (for whatever ratio) then I'm sure that it'll be made clear how many shares are required to participate in voting rights.

[bryant.coleman]

I am holding 11 shares of BTC-TRADING-PT...

11 at ฿0.8174

After the split, I will be holding 1,100 shares right?

1,100 at ฿ 0.008174

The total number of shares as of now is 100,000 (Market Cap of ฿ 81,740 or Ł 2,400,000).
This will increase to 10,000,000.

[JohnGalt]

I am holding 11 shares of BTC-TRADING-PT...
11 at ฿0.8174
After the split, I will be holding 1,100 shares right?
1,100 at ฿ 0.008174

Yes. That is how a split works. Note also that after the split each share will represent 1/1000 LTC-GLOBAL shares (see below). That is why each share's value will be 1/100 of its previous value after the split. It is very important to understand that the total value of your shares (1.1 LTC-GLOBAL shares or 9.5854 BTC) is not changed by the split. A good analogy is that your $1 coin now becomes 100 pennies.

I must also point out that the plan is to split BTC-TRADING-PT shares at the same time that the LTC-GLOBAL shares split. The details are not available yet, but if LTC-GLOBAL splits 1000:1 (as I hope it does), then a BTC-TRADING-PT share will represent 1 LTC-GLOBAL share and not 1/1000.

The total number of shares as of now is 100,000 (Market Cap of ฿ 81,740 or Ł 2,400,000).
This will increase to 10,000,000.

The terminology is a little confusing because shares of this fund work a little differently from other securities on the exchange. The market cap is 1000 times the share price, not 10,000.

"Shares: Outstanding 1000 / 10000 Issued".

"Issued" shares are the number of shares issued by the exchange to the fund, and available to be issued to shareholders. They effectively represent the maximum size of the fund. Currently, only 1,000 of the 10,000 shares are active. These are the "outstanding" shares and they are all owned by shareholders (and John Galt). Each outstanding share represents exactly 1/10 LTC-GLOBAL share, so the outstanding number determines the market cap. The other 9000 currently represent nothing. The number of outstanding shares changes as assets are added or removed from the fund.

After the split, both of these numbers will be multiplied by 100. Since the assets held by the fund are not changed by the split, each share will be worth 1/100 of its value before the split and the market cap remains the same.

[stslimited]

"Excessive wait trying to get lock on"  when trying to sell something

[gaba]

That 'asks' wall now going in opposite direction. So we must wait. Thanks!

[JohnGalt]

That 'asks' wall now going in opposite direction. So we must wait. Thanks!

The value of LTC has dropped compared to BTC, so the 288 LTC ask is worth less in BTC now.

[stslimited]

ActiveMining is about to be the highest volume. Get a couple more ventures like this and these dividends here will go through the roof!

[bryant.coleman]

Wow... ฿ 0.0049 dividend per share! I did the right thing by buying up 9 more shares in July. 

Now I have 20 shares.