The ASICMiner wow.

[MPOE-PR]

So, doing a little off the cuff calculation, if ASICMiner actually maintains hashing power online sufficient to produce 15 blocks a day (they are currently doing a little under that, but are also saying they're using only part of their gear, and also difficulty is bound to go up so it's a mixed bag), they will be making about 15 * 25 * 30 ~= 10k BTC a month.

That is about what S.DICE averages, or half a S.DICE good month. Of course, unlike S.DICE ASICMiner actually has debt, which from what Friedcat declared is to the tune of about 5k BTC (smart having liabilities denominated in fiat, by the way, the recent lift slashed the servicing bill significantly). They will also be spending some resources on electricity and maintenance. There is also the risk that the chips blow up too soon, which is hard to estimate (good chips last for decades, bad chips may burn out in fifty hours).

All these things considered it is perhaps not unreasonable to judge ASICMiner revenue generation ability in the 5 to 15k BTC a month range. If this is in fact correct it's also not unreasonable to judge ASICMiner's market cap roughly equal or a little under that of Satoshi Dice, in which case the 400,000 share company would be worth on MPEx somewhere between 3 and 600k BTC, or between .75 and 1.5 BTC per share, making Bitfountain the third multi-million dollar Bitcoin public corp in Bitcoin history.

It's unclear how much risk discount investors would be wanting to apply to that valuation, and it's also unclear how much discount will willy-nilly end up being applied in the event ASICMiner actually foregoes liquidity and lists on some marginal venue. But in any case things look pretty bright at the moment, so well done!

[Uglux]

Sounds like attention whoring for S.DICE and your master. But, it's your job.

[memvola]

are also saying they're using only part of their gear, and also difficulty is bound to go up so it's a mixed bag), they will be making about 15 * 25 * 30 ~= 10k BTC a month

Seems doable to me. Within a week, it's expected to increase its hashrate 6-fold, and then up to 36-fold in a few months. There is very little cost to producing these devices for them and this could continue until electricity costs become a significant expense. So it's likely that they will make far above those numbers initially, then the profits will gradually go down. Assuming they make new breakthroughs in the coming years (superior chips, cheaper power sources, an innovative sales strategy, etc.) they can keep that average for a long time. I think it has a better future and competitive advantages in its area than Satoshi Dice.

[cedivad]

I could even invest $crazy_amount into asicminer, what I don't understand is, what stops them from taking away the knowledge they have now to start another company where they own 100% of the shares?

[memvola]

I could even invest $crazy_amount into asicminer, what I don't understand is, what stops them from taking away the knowledge they have now to start another company where they own 100% of the shares?

Same thing that stops them from not paying anything I guess, since everything works on trust currently. This can (partially) be remedied though, but it would take some effort.

[MPOE-PR]

are also saying they're using only part of their gear, and also difficulty is bound to go up so it's a mixed bag), they will be making about 15 * 25 * 30 ~= 10k BTC a month

I think it has a better future and competitive advantages in its area than Satoshi Dice.

Possibly. The future is notoriously difficult to predict.

[Agent Provocateur]

I've read in another thread asciminer shares will not declare anymore divs at a certain point, after that just representing share of business. This should be considered when talking about their value, especially at a definite time.

[Deprived]

I've read in another thread asciminer shares will not declare anymore divs at a certain point, after that just representing share of business. This should be considered when talking about their value, especially at a definite time.

Link please - as you definitely misread something (or took a troll seriously).

[cedivad]

I've read in another thread asciminer shares will not declare anymore divs at a certain point, after that just representing share of business. This should be considered when talking about their value, especially at a definite time.

Link please - as you definitely misread something (or took a troll seriously).

After the first 0.1 (the ipo price) they will pay back another investor or stuff like that, after that, you own 1/400000 of the company.

[bitfair]

I've read in another thread asciminer shares will not declare anymore divs at a certain point, after that just representing share of business. This should be considered when talking about their value, especially at a definite time.

Link please - as you definitely misread something (or took a troll seriously).

After the first 0.1 (the ipo price) they will pay back another investor or stuff like that, after that, you own 1/400000 of the company.

There seems to be some misunderstandings flying around the forum here, about that, so let's try to put that to rest.

From the first post of the main ASICMINER topic: https://bitcointalk.org/index.php?topic=99497.0

ASICMINER has 200,000 shares in total. Each share gets
1/400,000 of the voting power of, and the regular dividends from, the Bitfountain
IC company registered in China. In addition, before investors of ASICMINER
break even against the IPO price, all net gains from Bitfountain will be paid
to them.

[MPOE-PR]

I've read in another thread asciminer shares will not declare anymore divs at a certain point, after that just representing share of business. This should be considered when talking about their value, especially at a definite time.

Yea I've never seen that afair.

The only concern here, of course, is that the liquidity event for ASICMiner holders has already started a while back and the window may soon be closing. If the current BTC leg up continues and for as long as it continues this possibly isn't as much of a practical concern, but otherwise investors that took the devrisk should have been able to divest starting at the latest this Monday, Feb 10th.

Basically what is happening here is that investors are prevented from separating the risk types they are subscribing to - those who advance capital for development of a risky new product aren't often if at all the same who underwrite operations risk and FX risk in particular. Normally ASICMiner would be flipped all through this month from the angel/seed type of investors that get a project from dream to prototype to the venture type of investors who normally get a company from prototype to market share. The fact that people can't hardly take profits and move on in spite of having correctly picked a winner is no doubt infuriating, and for good reason. They should have had the clear exit here by now and be counting their profits in hand rather than on paper.

[Agent Provocateur]

can't find the discussion right now, but the two answers above cleared it up, thanks. It's more to be seen as a bonus slowly dripping away

[MPOE-PR]

can't find the discussion right now, but the two answers above cleared it up, thanks. It's more to be seen as a bonus slowly dripping away

Basically the common stock gets a guaranteed 100% net as dividends up to .1 per share after which dividends revert to being set by the corp to whatever level they deem adequate (this is kinda how irl corps work actually). If the foregoing numbers are correct it comes to about 3 months' worth of 100% guaranteed divs.

[skibum]

Can anyone point me to the "best" and most conflict-of-interest-free ASICMiner valuation analysis?  "Best" and "most" are relative terms (obviously ).  Thanks.

[MPOE-PR]

This would be it I guess. I certainly don't have any interest in it, MP had shorts which meanwhile expired, it's as good as it gets.

[DutchBrat]

can't find the discussion right now, but the two answers above cleared it up, thanks. It's more to be seen as a bonus slowly dripping away

Basically the common stock gets a guaranteed 100% net as dividends up to .1 per share after which dividends revert to being set by the corp to whatever level they deem adequate (this is kinda how irl corps work actually). If the foregoing numbers are correct it comes to about 3 months' worth of 100% guaranteed divs.

Maybe I am overly optimistic or just have my calculations wrong, but I think you are way off with your 3 months' worth of guaranteed divs (maybe I just misundestand you)

From Friedcats last update it became clear that there are 1 million rmb in loans and costs that need to be paid short term. After that has been taken care of the initial investors will get dividends up to the point of 0.10 btc after which all 400.000 shares will share in the profits through dividends (payout ratio of between 60 - 80 % of profit as dividend).

They are currently strsstesting with 2TH but have enough chips in hand to deploy up to 12TH in the 'short term'.

12 TH on top of the 24 TH network speed would be 1/3rd of the network speed netting them on avg 1200 BTC a day. If they can get everything online by next week sunday they will most likely have been mining without any asic comppetition other than the 2 avalon asics currently out there.

On avg they wil have mined 7 days for 600 BTC per day which currently nets $15.000 per day for a total income of a little over $100.000

At that point they will be making 1200 btc a day which equals $30.000 a day

1 million rmb = $160.000 which means even if BFL starts sending out asics to their customers by the end of next week, ASICMINER will probably be debt free and have the costs paid for another batch of chips by March 1st.

Afte that it really depends on BFL and Avalon how profitable ASICMINER will be for their investors.

They need to mine 20K BTC to pay back their initial investors (actually only 15K as only 150.000 shares were sold throug the ipo) which means it takes between14 days to pay the initial dividend if BFL has another 3 week delay and perhaps 1 month to pay back the original investors. All depends on BFL basically....

Am I way too optimistic?

[MPOE-PR]

can't find the discussion right now, but the two answers above cleared it up, thanks. It's more to be seen as a bonus slowly dripping away

Basically the common stock gets a guaranteed 100% net as dividends up to .1 per share after which dividends revert to being set by the corp to whatever level they deem adequate (this is kinda how irl corps work actually). If the foregoing numbers are correct it comes to about 3 months' worth of 100% guaranteed divs.

Maybe I am overly optimistic or just have my calculations wrong, but I think you are way off with your 3 months' worth of guaranteed divs (maybe I just misundestand you)

From Friedcats last update it became clear that there are 1 million rmb in loans and costs that need to be paid short term. After that has been taken care of the initial investors will get dividends up to the point of 0.10 btc after which all 400.000 shares will share in the profits through dividends (payout ratio of between 60 - 80 % of profit as dividend).

They are currently strsstesting with 2TH but have enough chips in hand to deploy up to 12TH in the 'short term'.

12 TH on top of the 24 TH network speed would be 1/3rd of the network speed netting them on avg 1200 BTC a day. If they can get everything online by next week sunday they will most likely have been mining without any asic comppetition other than the 2 avalon asics currently out there.

On avg they wil have mined 7 days for 600 BTC per day which currently nets $15.000 per day for a total income of a little over $100.000

At that point they will be making 1200 btc a day which equals $30.000 a day

1 million rmb = $160.000 which means even if BFL starts sending out asics to their customers by the end of next week, ASICMINER will probably be debt free and have the costs paid for another batch of chips by March 1st.

Afte that it really depends on BFL and Avalon how profitable ASICMINER will be for their investors.

They need to mine 20K BTC to pay back their initial investors (actually only 15K as only 150.000 shares were sold throug the ipo) which means it takes between14 days to pay the initial dividend if BFL has another 3 week delay and perhaps 1 month to pay back the original investors. All depends on BFL basically....

Am I way too optimistic?

I don't know if you're too optimistic or not, but I'd guess maintaining 1/3 of network output for any extended sort of period seems improbable. While they may end up as high as that temporarily (maybe, who knows?) I would imagine on a yearly sort of granularity 10ish% seems more likely, or perhaps even overstated.

[matauc12]

can't find the discussion right now, but the two answers above cleared it up, thanks. It's more to be seen as a bonus slowly dripping away

Basically the common stock gets a guaranteed 100% net as dividends up to .1 per share after which dividends revert to being set by the corp to whatever level they deem adequate (this is kinda how irl corps work actually). If the foregoing numbers are correct it comes to about 3 months' worth of 100% guaranteed divs.

Maybe I am overly optimistic or just have my calculations wrong, but I think you are way off with your 3 months' worth of guaranteed divs (maybe I just misundestand you)

From Friedcats last update it became clear that there are 1 million rmb in loans and costs that need to be paid short term. After that has been taken care of the initial investors will get dividends up to the point of 0.10 btc after which all 400.000 shares will share in the profits through dividends (payout ratio of between 60 - 80 % of profit as dividend).

They are currently strsstesting with 2TH but have enough chips in hand to deploy up to 12TH in the 'short term'.

12 TH on top of the 24 TH network speed would be 1/3rd of the network speed netting them on avg 1200 BTC a day. If they can get everything online by next week sunday they will most likely have been mining without any asic comppetition other than the 2 avalon asics currently out there.

On avg they wil have mined 7 days for 600 BTC per day which currently nets $15.000 per day for a total income of a little over $100.000

At that point they will be making 1200 btc a day which equals $30.000 a day

1 million rmb = $160.000 which means even if BFL starts sending out asics to their customers by the end of next week, ASICMINER will probably be debt free and have the costs paid for another batch of chips by March 1st.

Afte that it really depends on BFL and Avalon how profitable ASICMINER will be for their investors.

They need to mine 20K BTC to pay back their initial investors (actually only 15K as only 150.000 shares were sold throug the ipo) which means it takes between14 days to pay the initial dividend if BFL has another 3 week delay and perhaps 1 month to pay back the original investors. All depends on BFL basically....

Am I way too optimistic?

That is of course if all goes well. And the fact friedcat somewhat omitted Details on mining specifically in his last update makes me uncertain on the timeline for the full 12TH.

Also, I am unsure about how exactly the unsold shares affect dividends, I don't necessarily understand that part really well, but I got the impression that it pretty much means "nothings different for dividends" which means 20kbtc, not 15k.

[skibum]

Interesting. What about the following?

1) ASICMiner enterprise value calculation (showing each component) - http://en.wikipedia.org/wiki/Enterprise_value#EV_equation

2) ASICMiner Fully diluted shares outstanding calculation - http://www.investopedia.com/terms/f/fullydilutedshares.asp#axzz2L3xDoLmh

3) Some valuation metrics and ratios based on the above that would be suitable to a Bitcoin mining company.  For example, in the metal-mining world, we have this: https://www.google.com/search?q=Valuation+of+Metals+and+Mining+Companies (see what they talk about in some of those reports).  In the Bitcoin-mining world we have.... this thread

One reason I am so interested right now is because of these auctions: https://bitcointalk.org/index.php?board=73.0 .  As I write this, ASICMiner shares are bid up to 0.42 BTC per share (and rising).  At that price, what is the market capitalization of ASICMiner?  And how does it relate to relevant metrics?  For example, related to the cost and capacity of their mining equipment, etc.  What is the cost and capacity of their equipment, BTW?  Those numbers seem like the should be "easy" to calculate relatively accurately, depending on the information that is available.  The hard part is the DCF and other forward-looking valuations, of course.  But at least maybe we can get some of the low-hanging fruit posted here (#1, #2, and some of #3).  ??   

[matauc12]

Interesting. What about the following?

1) ASICMiner enterprise value calculation (showing each component) - http://en.wikipedia.org/wiki/Enterprise_value#EV_equation

2) ASICMiner Fully diluted shares outstanding calculation - http://www.investopedia.com/terms/f/fullydilutedshares.asp#axzz2L3xDoLmh

3) Some valuation metrics and ratios based on the above that would be suitable to a Bitcoin mining company.  For example, in the metal-mining world, we have this: https://www.google.com/search?q=Valuation+of+Metals+and+Mining+Companies (see what they talk about in some of those reports).  In the Bitcoin-mining world we have.... this thread

One reason I am so interested right now is because of these auctions: https://bitcointalk.org/index.php?board=73.0 .  As I write this, ASICMiner shares are bid up to 0.42 BTC per share (and rising).  At that price, what is the market capitalization of ASICMiner?  And how does it relate to relevant metrics?  For example, related to the cost and capacity of their mining equipment, etc.  What is the cost and capacity of their equipment, BTW?  Those numbers seem like the should be "easy" to calculate relatively accurately, depending on the information that is available.  The hard part is the DCF and other forward-looking valuations, of course.  But at least maybe we can get some of the low-hanging fruit posted here (#1, #2, and some of #3).  ??   

One  interesting aspect you won't find on Wikipedia that has a huge impact though is the effect btc deflation has on the market. It goes against most strict rules and theories international market has since they usually deal with inflation (and also at a much lower %) and also because the large scale makes those theories more solid. Here, its a smaller scale if a couple people that hold the shares believe btc/USD is gonna increase a lot so over evaluate (which is the proper thing to do if you do indeed believe its gonna deflate). The thing is pretty much, it is gonna be over evaluated if you base it off the same theories as normal market, but how much is too much?