[BitFunder] TU.SILVER -- News & Reports

[usagi]

Latest News: Bitcoin Crash Report! Sunday April 14th, 2013
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Following is the contract I am using for the issue of TU.SILVER on BitFunder.

=Issuer Detail======
usagi
usagi.meijin@gmail.com
Longtime forum member


=Contract======
SILVER is a company which operates a silver fund enabling investors to hold physical silver. We also sell covered call contracts to pay for secure storage, generate revenue for the company, and pay a modest dividend.

1. Each outstanding share in SILVER represents 1/10th (0.1oz) of 0.999 grade (or better) physical silver.

2. SILVER will allow shareholders to exchange shares for PHYSICAL silver bullion at any time:
2a. Shareholders must trade-in their shares in lots of 5, as the minimum denomination we can ship is a 1/2 oz. silver round.
2b. Shipping is 1 share per 10oz (i.e. 1%) airmailed anywhere in the world, with tracking number and insurance. Additional shipping options are available at the customer's expense. SILVER is not liable for customs, duties, taxes, VAT, etc.

3. SILVER will sell covered call options to generate revenue and pay for secure storage fees.
3a. SILVER will not sell covered call options if the call of the contract would reduce the backing of the fund below one tenth ounce of silver per share (unit).

4. SILVER will hire an advisor to prepare and publish acceptable financial reports twice per year.
4a. The current advisor is DeadTerra.

5. The issuer assumes personal liability for the silver and guarantees investors will retain the ability to claim their physical silver by trading in their shares as outlined in clause #2.

6. We have an exclusive arrangement with BitFunder to support BitFunder as a platform. We will not trade on any other exchange until August 2013.
6a. We can not honor the trade-in program for shares of an unlicensed passthrough operation.


=Executive Summary======
I know the silver market very well and I have an excellent OTC rating. I have sold gold and silver on bitcointalk and on ebay for many years and I only have positive feedback from my customers. I have been watching the silver market for about six years now and I have a great business idea which I believe will work: SILVER. I hope you agree that the contract I've come up with is a good deal.

The core business here is not just allowing investors to buy silver in bitcoins like any other fund -- it's to leverage that position to generate dividends. The SILVER advantage is that if we are stopped out on our cash position, our physical SILVER rises in value to cover the loss and provide reasonable returns, while still allowing us to honor the trade-in program. While if the price of silver declines or remains steady, we generate income from our trading strategy.

The ability to generate dividends along with the promise of backing and the ability to claim your physical silver at any time, makes SILVER a unique business model that I feel will work well. I'm very excited to be able to stand by this contract and you may feel free to contact me by telephone or by e-mail if you have any questions.


=Business Description======
Primary Business: Silver Storage
To start the company we will convert existing ounces of physical silver into units of the fund. We will then sell these units into the market at a premium to spot price, representing the existing premium* on 1/2 oz. coins and need to pay for secure storage. From that point physical silver will be bought and converted to shares of SILVER either out of the cash position of the company or immediate-term loan, then converted to units and sold on the market.

Secure storage costs 0.49% per year in Hong Kong (VIA MAT or G4S). Other vaults around the world have similar rates, although Switzerland is notably higher at 0.99% per year. I am planning to start with the vault in a local bank so that we may inspect the silver at our leisure.

Secondary Business: Selling Covered Calls
We will write covered call contracts against the silver position in order to pay for secure storage fees and generate revenue for shareholders. This will allow us to pay for secure storage fees on an ongoing, permanent basis, and to expand the fund.

Since storage fees are around 0.5% per year and we expect to make ~1% per month on the invested value, this implies we only need to write calls against 6% of the position in order to pay for secure storage. As we will be selling each unit for 5% to 10% above face value, the cash position will cover the risk of loss. As a result, I feel there is a very low risk of breaking the fund's model of retaining one tenth of an ounce of silver per unit. In short, should we get called on such a small position, we will have more than enough cash on hand to settle with no risk to the holders. Failing that, please see clause #5 in the contract.


=Definition of the Market======
TL, DR: I have a passion for silver. Silver has been money for even longer than gold. Many languages in the world use the word silver as the word for money. The world's supply of silver is precariously low in comparison to historical supply. There is a historical ratio of 15 or 16 ounces of silver to one ounce of gold (due to mining supply), however due to industrial use this has fallen to a 1:1 ratio. Therefore I personally feel the silver story is more than just unique. I believe it presents an opportunity that will change the lives.


=Products and Services======
Product: None, however one share (unit) is guaranteed to represent 1/10th of an ounce of silver, redeemable upon demand.

Services: Exchange program
We will allow investors to exchange shares of SILVER for physical silver on a 5 share for 1/2 oz round basis (or for larger denomination bars upon request, should we have them available). There will be a 1 share fee for shipping anywhere in the world per 10 oz.


=Organization and Management======
Organization and Management:
I am the issuer and responsible for the daily operation of the company.

We have also hired an advisor to provide oversight and prepare financial reports.

Shareholder motions require 60% to pass.

Any shareholder with 5% or more can raise a motion.

I will maintain a forum thread and I will listen to and respond to the community's advice.


=Marketing Strategy======
Out of the profits of the fund we will attempt to buy advertising on bitcoin-based websites like bitcointalk, feedzebirds, or any other community-based advertising services.

I am planning to spend ~10% of revenue on advertising. Not too much, basically just that or a little less.


=Financial Management======
Start up costs will be around 10 BTC for initial advertising and to retain our financial advisor.
I plan to retain 1/3rd of net profit into the company's cash position, take 1/3rd as management fee, and pay 1/3rd as distribution to shareholders.

[1714661109]

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[1714661109]

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[1714661109]

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[usagi]

FAQ (Frequently Asked Questions):
1. (from Deprived, paraphrase) "This thread is self-moderated. What does that mean?"
A: It means I can delete your posts but I cannot edit them. For clarification here's the entire moderation policy:

• No swearing.
• No excessively off-topic comments (no rambling).
• No scam accusations.

If you break these rules is I'll send you a PM requesting you make an edit. If you break them repeatedly I will simply delete your post. Regarding swearing, blotting out words is not an acceptable compromise. Just don't swear. Regarding scam accusations, if you have solid information that I or anyone is scamming, go post it on the scam accusations forum where it belongs. If you do not have solid information but are merely suspicious, please feel free to post a logical, well-thought out question. I'll be pleased to answer it and credit you in the FAQ. Note I am not a moderator or anything -- If you can't abide my local policies you're free to post whatever you want -- in your own threads.


2. (from burnside) Seems like investors would be best served with two assets so that they can mix and match whatever exposure they want. For example TU.SILVER (100% silver backed asset, nothing but a silver backstop.) and NYAN.2013 (The Usagi 2013 Fund). It would definitely simplify things a bit, maybe eliminate some confusion?
The reason we keep an investment position is to pay for expenses like shipping and secure storage. In other such funds, fees are taken out of the core position or applied on top of the price you pay for units. This guarantees that your investment will go to zero if you hold for the long term. This is what makes TU.SILVER unique, we preserve the long term value of your investment.

Our strategy is to keep the investment value of our units as unobtrusive as possible. This way, the added value from our services (like secure storage and free shipping) can be priced by market demand, and we can make money by selling new units of silver into the market. If we try to sell shares for more than they're worth, the market will trade under us and we won't be able to grow our business or make money selling silver. So we have a strong financial incentive to keep prices tied to silver.

Looking at how this has worked out so far, early investors paid about .21/unit representing almost 100% into silver. But now that the price of silver in BTC has fallen 90%, our investors have not lost 90% of their money. Our investors still have the same amount of silver they always had, but they have added value from our investment position and from 0.039337 BTC in distribution payments. The distribution payments alone represent more than 200% of the current value of silver backing each unit. So versus someone who just bought silver and held, our investors have done very well. That being said, we recognize the fund feels overpriced and unattractive to new investment. Going forward we will continue to return value to investors via weekly distributions. This should lower the price and increase demand without lowering the value of our units for long-term investors. We hope that as we get closer to the spot price of silver this issue will not be as important as it seems right now.


3. (from Deprived, paraphrase) Can you (usagi) please give me a valuation of your company or provide access to the internal value calculator that you use?
I can't. The way TU.SILVER works is that I (usagi) fill the role of "general contractor" for TU.SILVER. I simply can't afford the time to get tied up in going over the books every day, so I've hired someone else to do it. This way I can more effectively produce value for the company in other areas. If you need accurate information about our company, please see our audited reports which are published at least monthly. You are also welcome to contact our financial advisor directly with any questions about the finances of our company.

If you are looking for a more in-depth relationship with TU.SILVER, we allow unitholders access to our books on the condition they not be shared or published. The fee for this service is 1 share of TU.SILVER.


4. (from Deprived, paraphrase) On April 25th, 2013, you stated that as a result of an accounting error made by usagi, cusdog discovered 30 BTC which was not factoring into the balance sheet. How did this mistake pass your previous audit?
It didn't pass the previous audit. What happened is that I had recently been inserting and deleting rows on the spreadsheet (they are done by hand) and I had forgotten to update the balance column. The entire point here is not that it passed an audit, but that it was caught by an auditor.


5. (from Deprived, paraphrase) Regarding the 30 BTC accounting error, why didn't your share price increase? ("Much to my amazement...it appears that somehow doubling internal value of shares has a negligible impact on their price.  Maybe I somehow misunderstood things ...
Your misunderstanding stems from the fact that we don't set the market price of the units -- the market participants do that. What's more, we announced that we sold out all shares and had also published a full explanation of this to TradeFortress in the thread. In short it's not us setting the price. We can't -- we have no more shares for sale. And obviously we are not profiting from this either. We agree with you that it's surprising that the price went up as much as it did, but that's the market for you. Our holders are free to enter sale orders at whatever price they want. For what it's worth, I will discuss with our advisor what to do in the future to mitigate wild price swings to the upside, should they become a problem for our unitholders.


6. (from Deprived, paraphrase) Regarding the 30BTC accounting error, was the money yours (usagi's) or the company's?
You answered your own question. You already know that cusdog found the error on our balance sheet. So there you go. On a deeper level, you should probably be reminded that the internal value calculations we provide are not financial reports and are not intended to represent investment advice. This is why we ask that our internal company documents not be published. Please see FAQ question #2 for more information on why I can't answer this more in-depth for you.





Letters and Comments from our Shareholders:

Subject: TU shares
« Sent to: usagi on: April 19, 2013, 09:45:17 PM »
hey man, (relatively) new to bitfunder but experienced with trading assets.  just wanted to say i bought shares today and im impressed by what you've got going on.  seems like too many issuers are scammers..shit like bakewell and ziggap damages the shit out of the market, but you and a few other solid bros are holding it up.  btw, your P/E is kicking the shit out of ASICMINER's...overrated...no way im paying 1.25 for that.  glad youre giving us a solid alternative


#bitfunder April 12th, 2013
[01:41] <######> wow nice dividend. thanks very much usagi

[usagi]

Update:

I'm pleased to provide the latest TU.SILVER weekly report. You can read it online here:

TU.SILVER Report -- April 14th, 2013

Forum version (for your convenience. For charts, please see the link above):

EDIT: The price of bitcoins has fallen to $60 during the creation of this report and is still extremely unstable.

The TU.SILVER Report
Special Report: Cypress Watch
April 14th, 2013

Dear Investor; it is our pleasure to present this week’s report. Let’s step right into the action by looking at the price which – at least for now – appears to have stabilized.

kitco.com   $1477.00 (23.44 BTC/oz.)
kitcosilver.com   $25.85 (0.2446 BTC/oz.)
Mt. Gox Weighted Average   $105.68

Local tops and bottoms are in, metals are down on Cypress news. To understand the future, look to the past.

THE CRASH IS OVER?
The major story is once again mtgoxUSD, which hit a new all-time high last week at over $250 USD before collapsing to $65 and (apparently) stabilizing just north of $100, all within a few days. Here’s the data from bitcoincharts.com:

[for charts please see PDF]
 
CHART DISCUSSION
We hypothesize whoever had been buying up until that point has now sold out, and that the price stability coupled with a net buying tailwind in the $90 to $110 range is a positive sign going forward. For us, seeing the MI dip down and the MFI go into danger mode seemed to confirm a reversal, so we bought 43.2oz. of silver mtgoxUSD $200. We now look towards price stability until the MI can cool off a bit and the price can work itself into the public consciousness. It is after all still around double what it was before all this started.

CYPRESS WATCH, SWISS WATCH
Mario Draghi is the most influential man in Europe now. “He undermined Cypres’ ability to sell gold at a higher level.” I liken this to a creditor seizing property and selling it at whatever price he can to get his money back. Peter Schiff writes,

“The European community is trying to force Cyprus to sell-off its gold…and now you have the anticipation that other highly-indebted European nations like Greece, Spain, Portugal, and Italy, that [all] have lots of gold, [will have to do the same]. Portugal has I think 90% of it’s reserves in gold—that’s about the highest in the world…[So] these countries [being] forced to sell their gold has really [spooked] the market, and people are selling in anticipation of this avalanche of selling by European central banks…[but] that’s a false idea…The reality is none of that gold is going to be sold into the ‘market’…[because]the ‘buyers’ will be other central banks.”

In the eye of history this article showcasing Mario “Do whatever it takes” Draghi will be seen as proof that Mario Draghi is a stalwart and steadfast Euro-man who does what he says he is going to do. Overall it is very interesting to see the Euro finally take center stage in Europe and to see what a centralized currency really implies in terms of nationalist politics.

After all, what is going on now amounts to a confiscation of national gold reserves. Details are sketchy but it appears as if the gold reserves of Cypress are going to be confiscated and sold into the market to help pay off the debt of Cypress. This is somewhat humorous because on one hand we are bred to feel this sort of thing is somewhat evil, but on the other hand no nation can use sovereignty to avoid paying its debts. In this way the EU has avoided a war and they have become the heroes of the hour.

Getting back down to earth, this news has acted to depress the price of metals. Investors have sold because they’re trying to get out before the fix is in. They hope to buy back later. This makes it a huge buying opportunity. Buying may be very wise indeed given the news of what’s coming. A joint paper by the US FDIC and the Bank of England for the G20 summit in Switzerland says similar plans have been made for US and UK depositors since prior to 2012, implying Cypress was just a test tube. So we think Peter Schiff is right. After all, what’s the latest news? Now that Cypress is over? We start to hear about Portugal.

Got silver?

For more information on TU.SILVER and how to protect your money in today’s crazy BTC market, please visit the TU.SILVER page on BitFunder:
https://bitfunder.com/asset/TU.SILVER

[usagi]

Wrap Up for Monday, April 15th, 2013:

Silver $22.85
MtGox $65.000
TU.SILVER internal valuation: 0.0884

Articles of interest (4/15):
"Gold Crush Started With 400 Ton Friday Forced Sale On COMEX" (ZeroHedge)
http://www.zerohedge.com/news/2013-04-15/gold-crush-started-400-ton-friday-forced-sale-comex

"Massive $20 Billion Paper Gold Sell Orders Trigger Stop Loss Selling And Unfounded Panic" (GoldCore)
http://www.goldcore.com/goldcore_blog/massive-20-billion-paper-gold-sell-orders-trigger-stop-loss-selling-and-unfounded-pani

"Gold suffers biggest one-day drop since 1980s" (MarketWatch)
http://www.marketwatch.com/story/gold-falls-sharply-copper-hit-after-china-data-2013-04-15?siteid=YAHOOB

"Extreme Nervousness in Regards to Collapse-Gold Silver a Must-Rick Rule" (USAWatchDog)
http://usawatchdog.com/extreme-nervousness-in-regards-to-collapse-gold-silver-a-must-rick-rule/

[usagi]

Forum edition (for your convenience)

The TU.SILVER Report
Interim Report
April 19th, 2013

Dear Investor; welcome to our interim report.

At TU.SILVER, our goal is to keep the price of our units very close to the price of silver. Fortunately or unfortunately in March and April of 2013 our business became far more successful than we predicted, and we are now heavily overweight BTC.

To combat this, we have decided it is no longer necessary to maintain a kitty to cover the expenses of the fund. We have therefore closed the TU.SILVER kitty account (1Kitty8g4AMrU8QaLCntESmrvJNmz1QUGk) and made a special one-time distribution payment of 0.0071 per unit. The remaining amount will be recorded on our balance sheet and used to provide liquidity.

This action will lower our internal valuation by exactly 0.0071 BTC/unit and bring us much closer to parity with the spot price of silver (plus a fair and reasonable premium for vault storage, etc.) This should make us much more attractive to silver investors while still retaining the ability to pay for secure storage and offer free shipping worldwide to all of our customers.


For more information on TU.SILVER and how to protect your money in today’s crazy BTC market, please visit the TU.SILVER page on BitFunder:
https://bitfunder.com/asset/TU.SILVER

[ldrgn]

TU.SILVER stockholders: In the old thread I called Usagi to start publishing normal financial statements.  In another recent thread Usagi's reached out to try and bring an accountant on board to help with that process.  Good news for everyone involved and hopefully the endeavor works out.

[usagi]

TU.SILVER stockholders: In the old thread I called Usagi to start publishing normal financial statements.  In another recent thread Usagi's reached out to try and bring an accountant on board to help with that process.  Good news for everyone involved and hopefully the endeavor works out.

Well, we already have DeaDTerra watching over the books and vetting most major decisions. But the current plan is to give CSDOG access to our books and see what he thinks and what he can come up with. This is all part of listening to shareholders and making TU.SILVER the best it can be. I take the (constructive) criticism of people here very seriously. On that note,

...my own business, SILVER, has 12 downvotes and can't get listed despite being in profitable operation for four months.  

The hazing is more a forum thing.  We expect forum discussion (Q&A) as part of the approval process.  We realize not everyone can be a pro, so we lean heavily on the pros in the forums asking the hard questions.  This thread is a good example.  It's not always pleasant, but if your business plan is a good one it'll stand up just fine.

Responding to moderators is easy, you just post a response in your thread.  Most, if not all of the mods read the threads.

I'll take the LTC-GLOBAL moderators up on this and post responses here in the hopes that the moderators can either come up with some constructive criticism or vote YES on the assets

The following is an address to the LTC-GLOBAL moderators stating how I have addressed your issues with SILVER (posted April 12th, 2013):

1. Anonymous voted NO with comment: Contract is misleading. It repeatedly claims this is a coin shop - yet if you look at Bitfunder prices and accounts it's obvious that the price charged is massively over the price of silver. Huge additions are made to the price for various cash positions/investments - which is totally lost if you actually redeem shares for Silver. Contract needs to be re-written honestly to reflect that shares represent mainly non-silver investment - with exchange for physical silver requiring you to sacrifice the overwhelming majority of any investment you made, making it about the most expensive way to buy silver that exists.

Response: Fixed. Please see https://bitcointalk.org/index.php?topic=137459.msg1806063#msg1806063 and https://bitcointalk.org/index.php?topic=177747.msg1876258#msg1876258 for more information on how we've increased our value as a vehicle for owning silver without losing value for our customers.


2. Anonymous voted NO with comment: untrustworthy manager

Response: SILVER hired DeaDTerra to do the books and advise the fund. So you don't need to worry about trusting me, one of the most trustworthy people on BTC-TC is now watching over our books and vetting any major decisions we make. Additionally, we have put out an audited financial report. There is no longer any reason to think I will be an untrustworthy manager. Thank you for helping me make SILVER a better issue!


3. Anonymous voted NO with comment: Want identity escrow.

Response: Good idea. I am now the first asset issuer to do this. I have registered a BTC-TC account with BTCJam and I have linked my forum account, e-mail, paypal and e-bay to that account. Additionally, DeaDTerra knows my identity and I will instruct him to reveal it should it be required. Your request has been satisfied. Please change your vote to YES.


4. Anonymous voted NO with comment: Issuer has a poor track record.

Response: So did all mining bonds, such as YABMC, BTC-MINING, RSM, COGNITIVE, and so forth. I ran a mining fund which invested in the aforementioned securities. It's not really fair for you to vote NO with this comment, but I won't ask you to vote YES if you feel it's an issue -- I'd just ask you to be consistent and vote the same way you voted for YABMC, BTC-MINING, RSM... etc. However, talking about right now, if you look at how I am running TU.SILVER on BitFunder, you will see that I have a very good track record. Take your time on this one -- maybe check back in a month or so and I trust you will see that my track record is actually far better than those who disparage me. BAKEWELL and BITCOINRS anyone?


5. Anonymous voted NO with comment: Issuer has proven to be unreliable and untrustworthy in the past.

Response: This was one of the first NO votes. It was a bit harsh when it was made considering I was in the same boat as all other GLBSE refugees, but now that BMF and NYAN have liquidated almost all their assets and made payments to shareholders, it is simply no longer true. You can see that I am willing to step up to the plate with how I run SILVER. We are doing an excellent job and are receiving lots of positive feedback from our customers (check out post #2 in our News and Updates thread!) Everything I have done so far shows I am reliable and trustworthy (also see #1 above). Being honest, please come up with some constructive criticism or at least change your vote to ABSTAIN if you really don't want to vote YES!


6. Anonymous voted NO with comment: Don't give usagi any of your money or time

There's no reason to be nasty. It's not okay to vote NO if you don't like me on a personal level. Try to come up with some constructive criticism and let's make LTC-GLOBAL a better place to be. Leaving rude comments undermines the moderation process and makes it look amateurish. I strongly suspect that you wouldn't have written this if you were forced to reveal your identity as a moderator.

[burnside]

From the contract currently posted on SILVER on btct.co:

We have an exclusive arrangement with BitFunder to support BitFunder as a platform. We will not trade on any other exchange until August 2013.

Is Ukyo aware that you are taking over LTC-SILVER on litecoinglobal.com?  What are the consequences if you break your contract?  Is it prudent to be pursuing SILVER's approval on BTC-TC?

An interesting arrangement none-the-less.  Glad we didn't try that with BAKEWELL.     (BTC-TC does not force issuers to stay with us, quite the opposite, if they're unhappy, we make it easy to leave.)


Regarding the rest of the votes/mods, I said it before and will say it again, it is my opinion that you aren't going to shake the stigma until you've closed everything out on your ex-GLBSE assets in a way that doesn't leave people feeling like you've burned them.  Have all of the guarantees that you made on them been fulfilled?  (Sorry, haven't been tracking that closely, but I did try to help with the BITVPS stuff.)

Cheers.

[usagi]

From the contract currently posted on SILVER on btct.co:

We have an exclusive arrangement with BitFunder to support BitFunder as a platform. We will not trade on any other exchange until August 2013.

Is Ukyo aware that you are taking over LTC-SILVER on litecoinglobal.com?

I've informed him of the take over twice, and asked his opinion, but I did not yet receive a response. As far as I know it won't be an issue anyways since nothing is planned until after the exclusivity clause expires in August.

Self-moderation edit: We had an amicable discussion over this in the thread, and even Deprived had a few salient points to make. The net result is that we will not be taking over LTC-SILVER. I don't feel the discussion is 100% on topic for a news and updates thread so I will be deleting it. I'm not really interested in rewriting or moving the thread, but I'd comment on it briefly if in the future the issue rises again (if someone else is taking over an asset on LTC-GLOBAL) if it seems my experience here would be of any use. A big thanks to burnside and deprived for discussing it.

[usagi]

EDIT2:  Removed use of the f-word plus expansion on the MOO.COW situation after usagi threatened to delete post if I didn't.

Just remove the references; see post #2 (FAQ) for an explanation of our self-moderation policy.

[usagi]

The problem here is a little different -- we have management and shareholders on board, and the exchange has decided to stop the deal, killing the company that was being bought in the process (and likely John Galt's GOLD funds as well, the timing seems a bit too much of a coincidence).

Please don't drag me into this. My decision to shut down my gold funds has nothing to do with your situation. I am extremely happy with burnside and his exchanges.

You're getting a mention because I was planning on making a buyout offer to you when I heard your companies would close. I have no idea if you would have taken the offer but my point is now that there's no reason to make the offer. I can assure you it would be a very healthy offer for both you and your shareholders. You would walk away with the gold and I would refund you your asset creation fee, for starters. I assume (rightly or wrongly) that bringing the liquidity and size of TU.SILVER to your GOLD asset would make your shareholders a lot better off than they are now versus the company closing.

Anyways I wish you luck; it was you who inspired me to create SILVER. To be honest about it I am sad to see your companies close.

[usagi]

Update:

I'm pleased to provide the latest TU.SILVER weekly report. You can read it online here:

TU.SILVER Report -- April 24th, 2013

Management guidance includes a MSRP of 0.03945.

Please share your comments and criticisms of this week's report right here. Thanks and have a nice evening.

[Deprived]

So what's the new value/share or recommended trading price?
Wouldn't you be better off dividending it out to keep your price reasonable for anyone who wants to buy silver - or is there some way they can get their part of that 30 BTC if they turn shares in to receive silver?

[usagi]

So what's the new value/share or recommended trading price?
Wouldn't you be better off dividending it out to keep your price reasonable for anyone who wants to buy silver - or is there some way they can get their part of that 30 BTC if they turn shares in to receive silver?

I was going to answer this but I'm rushing out the door to go to work. Maybe DeaDTerra or cusdog can answer for me while I'm gone, or I'll have to get back to you after work. It should be the same or a little higher than the management guidance published in our recent weekly report but you'll have to hold for an official answer.

[🏰 TradeFortress 🏰]

Still hardly changes the fact that this TU.SILVER is a bad asset to buy if you want to buy SILVER

Here is from your newsletter: "THE BEST PLACE TO BUY SILVER IN BITCOINS"

1 oz silver round on other bitcoin accepting sites: ~$26
1 oz silver round via 10 shares of TU.SILVER: >$180 (there's actually not even enough asks, unless you want to pay 5 BTC for an oz)

[usagi]

Still hardly changes the fact that this TU.SILVER is a bad asset to buy if you want to buy SILVER

Here is from your newsletter: "THE BEST PLACE TO BUY SILVER IN BITCOINS"

1 oz silver round on other bitcoin accepting sites: ~$26
1 oz silver round via 10 shares of TU.SILVER: >$180 (there's actually not even enough asks, unless you want to pay 5 BTC for an oz)

Sure, I can agree with you that I personally wouldn't pay $180 an oz. for silver right now either. But on the other hand, we are a very different operation than something like Coinabul and I believe the market is placing a premium on our silver because of this.

For one, we stock all our silver. That's how we can ship anywhere in the world in 7 days. If you order from another supplier you are looking at 30 to 90 day lead times (or longer). This has very strong appeal to knowledgeable silver investors because they understand that silver has allodial title. We also don't charge shipping (which is reflected in the price people are willing to pay). Another extremely strong point to make is that as we are located in Asia, we offer geographic diversity. I personally believe this is why demand for TU.SILVER has driven the price so high.

Essentially, once we sell out we have no means of keeping a lid on the price. And as we're not the ones selling the silver at $180, we don't make any money on it. Heck, we would have to pay $180/oz if we wanted to buy back our own shares, too!

So while I agree with you the prices are a bit crazy, I think what we are really witnessing is the true price of "guaranteed immediate delivery fine silver" in coin form. I would go so far as to suggest that when you see a lower price in some other online coin shop, you are witnessing the market place a heavy discount on coins that haven't been sourced by a supplier yet.

[cusdog]

So what's the new value/share or recommended trading price?
Wouldn't you be better off dividending it out to keep your price reasonable for anyone who wants to buy silver - or is there some way they can get their part of that 30 BTC if they turn shares in to receive silver?

While the management of the fund is outside of my purview, I don't think that is a good idea at this point. My suggestion is once I finish the statements and they are green-lighted (should be May 1st or 2nd barring any unforeseen issues) discussion relating to these decisions can happen with more information for all parties.

Sorry for being a bit cryptic but I don't want to overstep.

[usagi]

...I'd prefer if he just answered the questions but am not expecting that to occur.

Of course, we'd all prefer if you'd just ask your questions -- but we're not expecting that to occur.

I have some free time now (I was too busy for you last night because of work, can't you read?) and have posted four of your questions in the FAQ for TU.SILVER. Thanks, but do try to be more patient next time.

I am working on a reply to the rest of your post in the TU.SILVER thread. I'll not respond here mainly because it's more important that everyone see the response in the updates thread (that's where the shareholders are) and I don't think I should justify an obvious troll thread with a serious response. So here's a video of a cat eating pancakes: http://www.youtube.com/watch?v=GBqoZYfz4os

Note: This post was deleted from Deprived's self-moderated thread and re-posted here.

[usagi]

The suspicion has to be that there's some co-mingling of funds/assets going on - with usagi's personal cash and the fund's mixed together.  That suspicion can, of course, be easily dispelled.

THE QUESTIONS

So here's the simple questions that need to be answered:

1.  Does that 30 BTC belong to investors or to usagi personally?  If to neither of those then who owns them?
2.  What's the new book value/NAV/whatever usagi calls the 'official' price/value of a share of TU.SILVER?
3.  If 'internal value' is significantly different to the answer to 2. then just what does it represent and why is it of interest to investors?  i.e. why was that doubling reported but not the extent to which a useful 'real' value had changed?
4.  Is cash belonging to usagi personally kept in the same wallets as cash belonging to the fund?
5.  Are shares of TU.SILVER owned by usgai personally kept in a seperate Bitfunder account to shares belonging to the fund (i.e. treasury shares)?

I appreciate it may take some days or weeks to determine the answers and that both financial advisors would need to be involved in addressing such complicated matters.

Sorry, I just don't agree that there is a suspicion or that the questions need to be answered. I did however add a few of your comments which seemed valid to the FAQ.

My general advice to you is to get off your high horse and get in line with the other investors of the company. You have no special right to my time to demand that I answer financial questions about the company. If you want that information you will just have to ask our financial advisor. That's just how our company is structured, so you better get used to it.

If you want access to our books, that's fine -- any shareholder can pay the fee just like everyone else.

But you already stole access to our company books and published them in spite of our company policy, and you are clearly hostile towards us due to your ridiculous "PSA" thread and the melodramatic way you are asking the above questions. So I've decided to simply not deal with you in the future, at least until such time as you stop behaving like a troll. Try being a bit more down to earth and stop framing me as a scammer in your questions, and then we'll talk.

Good luck!

[usagi]

So what's the new value/share or recommended trading price?
Wouldn't you be better off dividending it out to keep your price reasonable for anyone who wants to buy silver - or is there some way they can get their part of that 30 BTC if they turn shares in to receive silver?

We have already been doing this for the last three weeks. As well, all the other information you have asked for is in those reports (really). Please read them before asking questions here.

2013-04-24 10:02:24    1,222    ฿0.00800000    ฿9.77600000
2013-04-18 12:09:22    1,222    ฿0.00710000    ฿8.67620000
2013-04-11 11:32:50    1,222    ฿0.01700000    ฿20.77400000
2013-03-26 15:39:28    790    ฿0.00140800    ฿1.11232000
2013-02-23 08:28:28    800    ฿0.00128000    ฿1.02400000

Above you can see the payments made at the end of February and March, but you can also see the last three interim payments made before the end of April. These represent distributions made from trading and writing options, but I suppose primarily from trading in and out of positions in JAH and LTC-ATF.B1.

There are many reasons why making these payments was a good idea. You have mentioned some, but you do not have a complete picture. For example yes, having a large non-silver component to the fund makes it less attractive for investors -- but not for the reasons you assumed. There is adequate value there to justify the price, but what makes it less attractive is that it does not provide a strong correlation to the price of silver. A lot of people get this point wrong. I just finished arguing with a troll on #bitcoin-assets who insisted my fund was garbage because it was so overpriced compared to silver. He refused to accept that we have about 50 BTC worth of coin and investments on hand and that is why we're worth a little more.

Also yes, as you mentioned earlier, having a large non-silver component also means investors won't want to redeem their ounces of silver. That is, you asked "is there some way they can get their part of that 30 BTC if they turn shares in to receive silver?" The answer to this is no, we don't do that. Now normally this is not a problem, investors could just sell their shares and buy even more real silver if they wanted. But a) that's needlessly complex and ruins the whole point which is that we stock and ship silver immediately upon request. b) it insinuates we are trying to run a fractional reserve scheme where we sell shares unbaked by silver -- which is a point I don't think you mentioned. Why does it imply this? Because we can operate in full knowledge no sane investor would redeem their shares. In a worst case scenario we could buy coins after the fact and pocket the difference. Photos and vault certificates would be meaningless in this case because we could have sold the silver and kept the money long ago. So keeping the price close to spot + coin premium + vault storage + shipping is actually a way to prove we're being honest. If we were jacking the books with a price very close to spot and the market moved against us we would instantly blow up. And consider this: we even make more money keeping prices low because as we send coins out to customers our long term costs for secure storage go down. Thus there is a three-pronged financial incentive for us to keep the price low.

In summary,
1. As you know, we have a 2% markup on sales of newly-issued shares. This is a financial incentive for us to keep the fund attractive to new investors (or those looking to redeem coins). We don't make any money if people buy and hold. Our storage costs actually go up. Therefore...
2. ...we have a financial incentive to allow customers to redeem all their coins at any time: our cost for storage goes down.
3. Keeping the price low not only makes the fund seem like a better value, but it shows we have the silver on hand because it encourages redemption. Trust drives customers to us like magnets because we are in the precious metals business.