Review of S.DICE

[thoughtfan]

should i buy?

I guess by the call you made prior to this current tranche you've got a pretty good feel for the market:

OH OH i feel S.DICE could go down because of this 50% supply increase, seems traders are buying it up only to dump it back slightly higher  

My prediction is unless someone comes in with big bucks and soaks up what's likely to be a lot more asks at around this price and at all increments on the way up than are currently showing we're going to have to wait for new money to come in to gradually push the price back up.  If there's no big demand right now the few current stockholders who would still consider increasing their S.DICE holding have some time to watch the market and buy when confident it's not getting lower.  If Erik's previously stated plan to release another 2,000,000 before the end of the week goes ahead we could be hovering around this mark for quite some time.

As far as I know there is no indication of a decline in play/profit/projected dividend and the value of total existing stock has not changed therefore it is still of the same underlying value as it was on Monday when it was trading .007x.  In that sense it's still a bargain but nobody knows what could happen to the business in the meantime and there is still a possibility this will have been an excuse for a total re-evaluation for many, such that the risks associated (e.g. risk of legal persecution) as re-assessed now forms a bigger part in determining value.  If that's the case the 'heady days' of .007x may never return

From a personal perspective with the bid side of the order book at Havelock looking as it is were I to sell my holding right now I'd be at a substantial loss*.  However I like that what happened last night was different again to what happened the previous two nights in terms of what can be gleaned and extrapolated (or guessed and unfoundedly speculated ) from it.

* Edit: A few minutes later and this is no longer the case with enough bids around the .62 mark that I am no longer in negative equity

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[adamstgBit]

should i buy?

I guess by the call you made prior to this current tranche you've got a pretty good feel for the market:

OH OH i feel S.DICE could go down because of this 50% supply increase, seems traders are buying it up only to dump it back slightly higher  

My prediction is unless someone comes in with big bucks and soaks up what's likely to be a lot more asks at around this price and at all increments on the way up than are currently showing we're going to have to wait for new money to come in to gradually push the price back up.  If there's no big demand right now the few current stockholders who would still consider increasing their S.DICE holding have some time to watch the market and buy when confident it's not getting lower.  If Erik's previously stated plan to release another 2,000,000 before the end of the week goes ahead we could be hovering around this mark for quite some time.

As far as I know there is no indication of a decline in play/profit/projected dividend and the value of total existing stock has not changed therefore it is still of the same underlying value as it was on Monday when it was trading 7.x.  In that sense it's still a bargain but nobody knows what could happen to the business in the meantime and there is still a possibility this will have been an excuse for a total re-evaluation for many, such that the risks associated (e.g. risk of legal persecution) as re-assessed now forms a bigger part in determining value.  If that's the case the 'heady days' of 7.x may never return

From a personal perspective with the bid side of the order book at Havelock looking as it is were I to sell my holding right now I'd be at a substantial loss*.  However I like that what happened last night was different again to what happened the previous two nights in terms of what can be gleaned and extrapolated (or guessed and unfoundedly speculated ) from it.

* Edit: A few minutes later and this is no longer the case with enough bids around the 6.2 mark that I am no longer in negative equity

I think 0.006 is a reasonable price, but the risks are high, the market feels saturated and there's still 3 million shares to go.... Do i wait and hope for a better price, or lock in this reasonable price... hmmmm....
... i placed a bid, i will give it more thought tomorrow.

[bitcoinBull]

Why does SatoshiDice need to raise capital? Are there any reports of players winning huge payouts that they aren't able to meet with current funds? If not, then there's no need for capital.

SD isn't raising capital.  It is not an issuance of new stock being sold by SD.  It is stock already existing that prior to this week was part of the 90% private holding now being been sold into the open market.  In other words it is the private holder of the shares being sold that is receiving the money raised, not the business.

[tinfoil hat on] The "private holder" could simply Erik Voorhees or an associate, it makes no difference. The question is, why are they selling their shares? Whether the shares already existed or newly "created" is a meaningless technicality. Fact is they are now selling on the open market. AFAICT, this is indistinguishable from raising capital. The question is why?

The other red flag is that it would be so easy for Mr. Voorhees to play his own game thereby creating fraudulent revenues in the blockchain. He would simply lose/win against himself, there is no risk and the only cost would be the block transaction fees. I don't know if this has been suggested elsewhere, but its the very likely that this is happening. Its the rule of thumb that companies starting gaming services (or any social activities, eg dating sites) simulate activity, simulate users, so the service or site doesn't appear dead. Real users see supposed "people" playing satoshidice on blockchain.info, it makes them think about playing too. How much of that is just simulated play with the service's own funds, and how much is real people risking actual coin? I bet that most is just simulated.

[thoughtfan]

Why does SatoshiDice need to raise capital? Are there any reports of players winning huge payouts that they aren't able to meet with current funds? If not, then there's no need for capital.

SD isn't raising capital.  It is not an issuance of new stock being sold by SD.  It is stock already existing that prior to this week was part of the 90% private holding now being been sold into the open market.  In other words it is the private holder of the shares being sold that is receiving the money raised, not the business.

The "private holder" could simply Erik Voorhees or an associate, it makes no difference. The question is, why are they selling their shares? Whether the stock already existed or newly "created" is a meaningless technicality. Fact is they are now selling on the open market. AFAICT, this is indistinguishable from raising capital...

You're right in that it makes no difference who of the 'private holders' is selling but my understanding is that there's a world of difference between private holdings being sold (to another private investor or to the public) and the business raising money by issuing new stock.  The latter increases the business's capital by creating more stock.  If the new capital brings in enough new revenue then profit as a percentage of capital will remain the same therefore the dividend will remain unchanged.  

But for this to happen the new capital would need to be spent on marketing or something to increase turnover sufficiently to keep the dividend the same.  So 'just' issuing new stock and increasing capital with no action to utilise the additional capital would result in a reduced dividend per share and have a consequent on share value.  This is not by any stretch of the imagination the same as selling privately held stock.

As for why Erik or associate is selling why does anyone sell shares?  I don't care as long as it is not diluting existing stock - which it isn't - even though there is an impact on price for the time being.

[tinfoil hat on]
The other red flag is that it would be so easy for Mr. Voorhees to play his own game thereby creating fraudulent revenues in the blockchain. He would simply lose/win against himself, there is no risk and the only cost would be the block transaction fees. I don't know if this has been suggested elsewhere, but its the very likely that this is happening. Its the rule of thumb that companies starting gaming services (or any social activities, eg dating sites) simulate activity, simulate users, so the service or site doesn't appear dead. Real users see supposed "people" playing satoshidice on blockchain.info, it makes them think about playing too. How much of that is just simulated play with the service's own funds, and how much is real people risking actual coin? I bet that most is just simulated.

This is virtually identical to what EskimoBob wrote on another thread to which evoorhees responded:

EskimoBob - I kinda felt like you were just spreading FUD, but I actually think you are legitimately concerned/skeptical, and that is the correct position to take. Everyone in Bitcoinland should be highly skeptical, and very careful. I don't want to fault you for it. You don't know me, and so I could just as easily be a scammer on teh interwebz. Your points are fine.

I'm not sure how to address them, other than to just keep working and building so that's what I'll do.

If you think S.DICE shares are a good deal, buy some. If not, don't buy them. I would rather people stay skeptical and avoid BTC equity listings entirely than lose their money to overly-speculative ventures and scam operations. It is through this period of trial by fire that we'll find who the virtuous people are, and I'd have it no other way.

I will tell you straightforward, that bets on SD are never manipulated in any way to make things look rosy. I'm not sure how to prove that to you, other than to just show you over time that it's true.

I would ask, however, that you try to avoid unsubstantiated claims. If you have a concern, please talk to me about it. I'm very public with who I am and what I do, and am reachable most of the day on Skype (account: evoorhees).

We'll let markets work, and the rest will be shown in time.

[bitcoinBull]

This is virtually identical to what EskimoBob wrote on another thread to which evoorhees responded:

Ah, thanks. I knew I couldn't be the only skeptical one..

[adamstgBit]

Tranche announcement - I'm going to keep the 3rd tranche available for another 24 hrs (until 5pm EST Saturday). After that, I'll remove it and will not be adding any other shares to the market. I'll hold on to the 4th and 5th tranches as it seems the market is satiated with the current supply.

whats going to happen when this wall is removed?

i think price is going to go down and stay down, no matter what kind of returns are seen next month...

[adamstgBit]

where do you get this graph?

[byronbb]

where do you get this graph?

From the greatest thread ever.

https://bitcointalk.org/index.php?topic=80312.0

[FTWbitcoinFTW]

Quote from: dooglus on February 08, 2013, 08:51:13 PM

https://bitcointalk.org/index.php?topic=80312.msg1512955#msg1512955

[Bitobsessed]

So with the BTC rallying up, S.DICE is valued at ... 1 000 000 000 * .0062 = BTC6200000 @ $30 | $18,6000,000
Is this high? low? about right?

Hmm...I dunno.  Just because BTC is at $30+ does not mean you can do calcs like that.  Is it extremely valuable, yes.  But to extrapolate like that, just does not make sense.  Think about it a minute.

[tvbcof]

From the block size discussions recently it looks like at least for a while we're going to be toying with the economics of transaction fees.

Also, as I suspected, a lot of people are getting good and sick of the SatoshiDice spamage and what it's doing to the system.  I now see (from blockchain.info) more than a little 'diceoncrack' spam as well.

I mentioned earlier on this thread that actual real-world actions might impact the function and/or viability of SatoshiDice.  Perhaps (and hopefully in my opinion) utilization of Bitcoin as a messaging system by player who leach off the ecosystem by passing the costs on to others are numbered.

[Korbman]

So with the BTC rallying up, S.DICE is valued at ... 1 000 000 000 * .0062 = BTC6200000 @ $30 | $18,6000,000
Is this high? low? about right?

Hmm...I dunno.  Just because BTC is at $30+ does not mean you can do calcs like that.  Is it extremely valuable, yes.  But to extrapolate like that, just does not make sense.  Think about it a minute.

I thought it was only 100 million shares total, not a billion?

Even so, how does valuing a company in USD (or any currency that a Bitcoin can be converted to) not make sense? Just because they operate in Bitcoins doesn't mean we can't do some quick math to figure out their "real world" worth...

[ThickAsThieves]

So with the BTC rallying up, S.DICE is valued at ... 1 000 000 000 * .0062 = BTC6200000 @ $30 | $18,6000,000
Is this high? low? about right?

Hmm...I dunno.  Just because BTC is at $30+ does not mean you can do calcs like that.  Is it extremely valuable, yes.  But to extrapolate like that, just does not make sense.  Think about it a minute.

I thought it was only 100 million shares total, not a billion?

Even so, how does valuing a company in USD (or any currency that a Bitcoin can be converted to) not make sense? Just because they operate in Bitcoins doesn't mean we can't do some quick math to figure out their "real world" worth...

It all depends on how you're looking at it. Some available assets can produce a mostly predictable % dividend each month (in BTC). If you start comparing those assets to assets that have a dwindling % due to USD influence, then the picture gets clearer.

On the flip side, there's nothing stopping SDICE dividends from skyrocketing if more whales decide to play, or, if an influx of normal players comes along. It's a gamble!

[Peter Lambert]

So with the BTC rallying up, S.DICE is valued at ... 1 000 000 000 * .0062 = BTC6200000 @ $30 | $18,6000,000
Is this high? low? about right?

Hmm...I dunno.  Just because BTC is at $30+ does not mean you can do calcs like that.  Is it extremely valuable, yes.  But to extrapolate like that, just does not make sense.  Think about it a minute.

I thought it was only 100 million shares total, not a billion?

Even so, how does valuing a company in USD (or any currency that a Bitcoin can be converted to) not make sense? Just because they operate in Bitcoins doesn't mean we can't do some quick math to figure out their "real world" worth...

Yes, the correct figure should be 100 million shares, which would put the company somewhere around 1.8 million USD.

Doing these calculations is absolutely OK. One can sell (or buy), right now, a share of satoshidice for 0.0062 bitcoins, and one can sell (or buy) a bitcoin right now for $30 (or $35 or whatever the current rate is), so by using the intermediate of bitcoins you can sell one share of satoshidice for 0.186 USD, that is where the market puts the price of shares of satoshidice in USD. You can make similar conversions to EUR, GBP, JPY, XAU, or whatever currency you want.

[davincisolari]

I just speculated on a few shares of S.Dice!  Bitcoins are awesome.  As a non voting share holder I do have one suggestion to S.Dice.  Expand your offerings.  You have an great product with a lot of traffic, why not try to capture more of the market?  Maybe you could sell 30% more of the company and hire developers to build a full service gambling website.  Your investors would love you for it.  Just my tow bits, thanks and keep up the good work!