Review of S.DICE

[molecular]

the difference between shorting and selling!

shorting: selling only to buy back lower
selling:    selling with no intention to buy back ever.

definitely a valid way to look at it. Will consider changing my mind.

[CurbsideProphet]

I'm shorting S.DICE  

its not crashing  

What was your logic behind an S.DICE crash?

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

[Peter Lambert]

I'm shorting S.DICE  

its not crashing  

What was your logic behind an S.DICE crash?

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

[molecular]

I'm shorting S.DICE  

its not crashing  

What was your logic behind an S.DICE crash?

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

It doesn't affect the amount of dividens in any case because the dividends are payed to all 100 million shares. If erik put up another 10 million on mpex that wouldn't change, because they would come from that already being-payed-to pool of shares.

[MPOE-PR]

It's a bit more complex than that of course.  Bitcoin can still contribute much more than the enormous contribution it already has in an effort towards proving the viability of alternatives to modern fiat currencies.  But on it's current trajectory Bitcoin is more-or-less destined for the same fate as the USD, and in my opinion, headed that way even faster than the USD when Brenton Woods is taken as a starting point.

To clarify, the 'fate' I mentioned is monopolization by parties who don't have the interests of the public at large as a primary goal.  Not that this was ever fully the case with the USD, but it has served surprisingly well over a fair period of time as a vehicle upon which the bulk of the population realized significant benefit by it's use and/because had some pretty decent management over much of it's lifespan.

Get something straight: your socialist notions are the problem, not bitcoin. Any functional (even marginally functional) economic system, any significant subsystem thereof (such as the currency) and any way to organize society whereby people are free is squarely at odds with your ideology. This is because your ideology is irretrievably broken.

It will never be the case that a world which includes everyone is worth living in. Ever.

[evoorhees]

the difference between shorting and selling!

shorting: selling only to buy back lower (covering)
selling:    selling with no intention to buy back ever. (getting the fuck out)


leveraged trading is playing with borrowed money.

"Shorting" specifically refers to selling shares you don't own (typically by borrowing them from a broker or someone else). You then -must- buy them back to cover that debt. Your bet is that the price will be lower, so you buy them back for less than you sold them for, and profit!

If you just have an asset and sell some of it, for whatever reason, that's not shorting, it's just called selling

[CurbsideProphet]

I'm shorting S.DICE  

its not crashing  

What was your logic behind an S.DICE crash?

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

I don't need to qualify anything.  He's talking about share price, not dividends.  They are two entirely different things.

[Peter Lambert]

I'm shorting S.DICE  

its not crashing  

What was your logic behind an S.DICE crash?

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

I don't need to qualify anything.  He's talking about share price, not dividends.  They are two entirely different things.

Right, share price. If evoorhees puts up a sell order for a million shares, that would not necessarily drop the price of the stock. If it is worth buying, then if more share go up for sale there will just be more people buying shares.

[CurbsideProphet]

I'm shorting S.DICE  

its not crashing  

What was your logic behind an S.DICE crash?

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

I don't need to qualify anything.  He's talking about share price, not dividends.  They are two entirely different things.

Right, share price. If evoorhees puts up a sell order for a million shares, that would not necessarily drop the price of the stock. If it is worth buying, then if more share go up for sale there will just be more people buying shares.

If nothing fundamentally changes other than an influx of new stock, the share price will decline.  If it's worth buying then buyers would already be bidding up the current price.  The current share price is the meeting of the CURRENT supply and demand.  If you increase the supply side, the price will go down without additional demand.  Current demand is already priced into the share price so like I said, unless there is a fundamental change to drive demand, increased supply will result in a lower share price.

[Peter Lambert]

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

I don't need to qualify anything.  He's talking about share price, not dividends.  They are two entirely different things.

Right, share price. If evoorhees puts up a sell order for a million shares, that would not necessarily drop the price of the stock. If it is worth buying, then if more share go up for sale there will just be more people buying shares.

If nothing fundamentally changes other than an influx of new stock, the share price will decline.  If it's worth buying then buyers would already be bidding up the current price.  The current share price is the meeting of the CURRENT supply and demand.  If you increase the supply side, the price will go down without additional demand.  Current demand is already priced into the share price so like I said, unless there is a fundamental change to drive demand, increased supply will result in a lower share price.

Ah, but that is where the supply and demand "at a certain price" comes in. It may be worth buying at 0.005 btc/share, but not as good a deal at 0.0055 btc/share, so people do not bid up the price. But if somebody comes along ad sells more shares, that does not change the calculation of whether it is worth buying at 0.005 so people will continue buying the shares. 

[adamstgBit]

hype, and its over valued because it seen as the only worthwhile bitcoin investment, i think soon many new IPOs will come out, and people will sell their over bought S.DICE to diversify into these new opportunists.

also at anytime 10million more S.DICE units can be injected into the market

and think about it... S.DICE gets really unlucky one month, that means some big players got lucky, these big players quit while they are ahead, and S.DICE goes under.

its not a sure bet that's for sure...

Why do you think another 10 million shares injected would crash the price? If it is a good investment at the current price for the 1st 10% of the company, why wouldn't it be a good investment for the second 10% of the company?

Because it's supply and demand.  If you double the supply without increasing the demand, the price will go down. 

I think there should be a "at a certain price" somewhere in there. If evoorhees puts up a sell order of 10 million shares at the current price,  that would not affect the amount of dividends I get from my shares next month.

I don't need to qualify anything.  He's talking about share price, not dividends.  They are two entirely different things.

Right, share price. If evoorhees puts up a sell order for a million shares, that would not necessarily drop the price of the stock. If it is worth buying, then if more share go up for sale there will just be more people buying shares.

If nothing fundamentally changes other than an influx of new stock, the share price will decline.  If it's worth buying then buyers would already be bidding up the current price.  The current share price is the meeting of the CURRENT supply and demand.  If you increase the supply side, the price will go down without additional demand.  Current demand is already priced into the share price so like I said, unless there is a fundamental change to drive demand, increased supply will result in a lower share price.

Ah, but that is where the supply and demand "at a certain price" comes in. It may be worth buying at 0.005 btc/share, but not as good a deal at 0.0055 btc/share, so people do not bid up the price. But if somebody comes along ad sells more shares, that does not change the calculation of whether it is worth buying at 0.005 so people will continue buying the shares. 

its not "worth buying" at these prices.
the IPO was kinda over priced too.
as bitcoin bubbles up, it will be less and less worth it.

[Peter Lambert]

If nothing fundamentally changes other than an influx of new stock, the share price will decline.  If it's worth buying then buyers would already be bidding up the current price.  The current share price is the meeting of the CURRENT supply and demand.  If you increase the supply side, the price will go down without additional demand.  Current demand is already priced into the share price so like I said, unless there is a fundamental change to drive demand, increased supply will result in a lower share price.

Ah, but that is where the supply and demand "at a certain price" comes in. It may be worth buying at 0.005 btc/share, but not as good a deal at 0.0055 btc/share, so people do not bid up the price. But if somebody comes along ad sells more shares, that does not change the calculation of whether it is worth buying at 0.005 so people will continue buying the shares. 

its not "worth buying" at these prices.
the IPO was kinda over priced too.
as bitcoin bubbles up, it will be less and less worth it.

SatoshiDice does business in bitcoins, so having the exchange rate go up is actually good for this stock.
Obviously a large number of people did not think the IPO was overpriced, since they bought up the shares.

SatoshiDice is doing much better than my 401k, I wish there was an easy way to move some of the money over without having to pay lots of money in withdrawal fees and taxes.

[adamstgBit]

If nothing fundamentally changes other than an influx of new stock, the share price will decline.  If it's worth buying then buyers would already be bidding up the current price.  The current share price is the meeting of the CURRENT supply and demand.  If you increase the supply side, the price will go down without additional demand.  Current demand is already priced into the share price so like I said, unless there is a fundamental change to drive demand, increased supply will result in a lower share price.

Ah, but that is where the supply and demand "at a certain price" comes in. It may be worth buying at 0.005 btc/share, but not as good a deal at 0.0055 btc/share, so people do not bid up the price. But if somebody comes along ad sells more shares, that does not change the calculation of whether it is worth buying at 0.005 so people will continue buying the shares. 

its not "worth buying" at these prices.
the IPO was kinda over priced too.
as bitcoin bubbles up, it will be less and less worth it.

SatoshiDice does business in bitcoins, so having the exchange rate go up is actually good for this stock.
Obviously a large number of people did not think the IPO was overpriced, since they bought up the shares.

SatoshiDice is doing much better than my 401k, I wish there was an easy way to move some of the money over without having to pay lots of money in withdrawal fees and taxes.

I'm not saying S.DICE is toxic, its good shit! and because of this its in a little bit of a bubble ATM,  price should fall to more reasonable levels soon enough.

I hope!

in any case I'm not going to cover my S.DICE short at a loss, i might do that for bitcoin but that's different

[adamstgBit]

its not "worth buying" at these prices.
the IPO was kinda over priced too.
as bitcoin bubbles up, it will be less and less worth it.

sunnankar made the argument in the beginning of this thread that shares are worth .0075

Now a few days are left in the month still for the whales to win it back... but it looks like satoshiDICE is going to have another great month.

Even with the BTC price rally (now reversing) how low does the share price need to get for it to be "worth buying" to you?

5BTC / 1000

holy shit S.DICE droped to 0.8BTC / 1000 a few hours ago

ok i'll buy at 2BTC / 1000

[Chalkbot]

Even with the BTC price rally (now reversing) how low does the share price need to get for it to be "worth buying" to you?

5BTC / 1000

holy shit S.DICE droped to 0.8BTC / 1000 a few hours ago

ok i'll buy at 2BTC / 1000

Adam, the 0.8 selloff was almost certainly due to a typo. That guy lost a lot of BTC selling way below the market price at the time.

The selloff and the hypothesis to how the mistake was made are documented in this chat log:
http://polimedia.us/trilema/2013/marketplace-excitement-with-expert-commentary-for-your-vicarious-trading-pleasure/

[adamstgBit]

Even with the BTC price rally (now reversing) how low does the share price need to get for it to be "worth buying" to you?

5BTC / 1000

holy shit S.DICE droped to 0.8BTC / 1000 a few hours ago

ok i'll buy at 2BTC / 1000

Adam, the 0.8 selloff was almost certainly due to a typo. That guy lost a lot of BTC selling way below the market price at the time.

The selloff and the hypothesis to how the mistake was made are documented in this chat log:
http://polimedia.us/trilema/2013/marketplace-excitement-with-expert-commentary-for-your-vicarious-trading-pleasure/

if somone made a typo once.... he can do it again!

short all the bitcoins s.dice!

[Bowjob]

Oh god.. someone lost a lot of BTC.. He was off by a factor of 10! I wonder if they guy harmed himself or something.

[Peter Lambert]

if somone made a typo once.... he can do it again!

short all the bitcoins s.dice!

But he lost all his money on that typo, so he can't make the same mistake again.

Money will flow from the stupid/weak/careless to the smart/strong/careful.

[Bowjob]

So.. I'm sure that guy who just lost 70 grand trading S.Dice at such a cheap price is here somewhere. If you are are reading this, care to share your story?

[Bowjob]

and so I'm trying to get an estimate of the bonds annual yield

First, Satoshi Dice is an equity play; not a bond. So you should be doing the appropriate financial analysis.

All original shares from the IPO have now been sold.

Now that you are quite a bit richer (or rather, your assets are more liquid now) what sort of stuff are you going to do with all those bitcoins (if you would like to share)?

A nice 8% jump in price has been nice for those of us holding shares. Where are all those people saying this was a horrible stock to hold? Cause it would take "like 10 years to make any money!"?

Well, actually its trading at around 0.0047 now so that is more like a 40% gain.

While not being a fan of the vices, this does present a fairly finance textbook example of a melt-up due to good news. Let me run through the analysis for the fun of it.

Although December had unusually high earnings of 3.2% (17,206.44888669 /537,375.97) the intriguing part is the strengthening of the SD balance sheet to the tune of about 28,000 BTC retained earnings.

To be conservative we will assume the public float dividend were doubled and paid out to the anonymous investor holding the other 90%. After all, the anonymous investor owns 9x more than the public float and would not want to jeopardize SD's solvency potentially having to shutter it due to bad luck and has probably not taken any dividends since they probably have plenty of cash from the IPO and could probably fly private wherever they want with this type of monthly cash-flow.

This leaves about 25,000 BTC of retained earnings which to exhaust would require about -4.795% negative luck on 550,000 BTC of bets compared to the Dec beginning retained earnings of -2.22%. Assuming the anonymous investor has taken no dividends then the luck probabilities change to -5.11% and -2.29%.

In other words, if you do the probability (some other math whiz can solve this if they feel particularly magnanimous) that SD will exhaust its RE's due to bad luck in the dice game and cease being a going concern then it reveals that solvency risk just plummeted massively causing an increase in the expected discounted future cash flows.





Everything else being equal, this additional 15,500 BTC of retained earnings, makes SD much safer of an investment with a much higher NPV which is already corrected for BTC exchange rate risk.

Consequently, a melt-up in the price is to be expected. What is fairly exceptional is that the issuer did not cancel the IPO's at .0037 or at least move the bid up; or maybe the anonymous investor bought them using some dividends. But that is neither here nor there, using a similar risk premium before Dec's earnings would put a price around at least .0075. So it will be interesting to see how long it takes to get there; assuming an average Jan luck.

S.Dice shares have reached 0.0075 in MPEX. Well done