TU.SILVER - What are the shares worth?

[Deprived]

This is a self-moderated topic.  The rules being applied are:

Any posts by usagi or friends will be deleted if they are fully or partially off-topic or attempt to weasel around the questions (clearly given at the end of this post) without actually answering them.  This will be done without delay or discussion - what's good for the goose is, after all, good for the gander.  If this happens repeatedly then, in accordance with the forum rules, usagi will be asked not to post further in this thread.  I'd prefer if he just answered the questions but am not expecting that to occur.

This topic exists because when I asked perfectly clear and simple questions in the main thread for TU.SILVER they were not answered and the second post of mine deleted.  If we can't discuss the security in its own thread then we'll make our own.

BACKGROUND

Today usagi made the following post:

Wow, this just blew me away.

As some of you know from the "Financial Reporting" thread, we have cusdog (a Registered CA) looking at our books now for TU.SILVER (thank you cusdog), in addition to DeaDTerra providing operational oversight and advice.

Well guess what. Cusdog just found an error in our books where I had inserted or deleted some rows and the balance was not updating properly. And, apparently, we have around 30 BTC in cash more than I thought.

Yeah I know, I'm in shock. When I corrected the mistake our internal value calculator shot up about 100%.

This is good news because we are going to need to spend some money soon on a silver purchase and this will definately soften the blow of a large amount of silver entering the fund. It's probably about time to pay our financial advisor (and cusdog!) something for the amazing job they're doing auditing our books as well.

So this is all-around great news. Maybe we can even step things up a notch and hire someone to manage an advertising campaign for us. Let me know if you have an ideas guys. I'm especially interested in suggestions for silver purchases. Do you want Freedom Girl rounds? Murray Rothbard rounds? Crazy Horse rounds? NTR silver bars? You name it, and I'll order it. Then you can choose what you like when you redeem your units for the physical.

Good luck and thanks to everyone invested in TU.SILVER for making this a smashing success!

The emboldening is mine.

Whilst it's amusing that someone can misplace half of their 'internal value' and not notice it (and the error get past some kind of rubber-stamping audit) that's not the main focus here.  The auditor not blinking at half the value vanishing is excusable - he probably just has past experience of companies run by usagi (so half value vanishing is entirely standard).


SO WHAT'S THE VALUE OF THE SHARES?

Usagi has been lately paying out dividends to reduce the non-silver element of the shares.  The most recent valuation of the shares was only given a few days ago - with a heavy reduction in price caused in part by that policy.

My reading of usagi's post above was that 30 BTC belonging to investors had been found - what else could the 'internal value' refer to after all?  And there were references to "we" further suggesting that the funds were something other than usagi's personal money.

So I posted asking the following (quoted with usagi's reply) which was NOT deleted:

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.

There were two parts to my question:

1.  A request for a new valuation - pretty simple you'd think as one was given only a few days ago.
2.  A question/suggestion that maybe the 30 BTC should be dividended out - if the funds belong to investors then retaining them undos the good work usagi had been doing in getting the price/share back somewhere towards being representative of actual silver prices.

Much to my amazement (and I WAS genuinely amazed) it appears that somehow doubling internal value of shares has a negligible impact on their price.  Maybe I somehow misunderstood things - and the found 30 BTC weren't investors' but belonged to usagi?


SO WHOSE ARE THOSE 30 BTC?

In the interim the price of TU.SILVER shares had risen sharply - my belief is that was because some people, like myself, read usagi's post as meaning the value of shares had doubled.  If internal valuation has doubled then it's not unreasonable to assume external valuation has increased similarly.

So I posted suggesting this should be clarified.  My post was then deleted and I was PMed a non-response to it.  As the PM was in response to a PUBLIC post I'd made (which has now been deleted) I quote my post AND usagi's PMed response here.

I misunderstood  (I think) what you'd said as meaning you'd found 30 BTC extra that belonged to your investors - and that the value of shares had nearly doubled.

If the 30 BTC you found belongs to you personally then maybe you should clarify that - so people don't mistakenly assume the shares massively increased in value because of this lucky find.

As I said, I simply can't confirm or deny anything of the sort for you. If you need a confirmation of what is going on, you will have to ask our financial advisor. Good luck!

Yes you read it right.  Usagi can't confirm or deny whether 30 BTC that were the subject of an accounting error in his fund belong to him or to investors.  I'm supposed to PM his financial advisor to find out.  That's DeadTerra who:

1.  Didn't even NOTICE the error during an 'audit'.
2.  Has yet to respond to a PM from me about his OWN business sent 3-5 days ago (it was just a question about transferring shares between his pass-throughs to S.DICE on 2 different platforms - nothing urgent or important).

No wonder usagi wished me "Good luck!".

Now in general after some major fuck up (and misplacing half your fund's value IS pretty major - if the found BTC doubled value then half was misplaced) it's good practice to be absolutely clear about what happened.  If usagi doesn't feel competent/qualfied to comment on his fund's value/share then he should get his financial advisor to post it in the thread - not leave everyone in the dark unless they PM.  If none of usagi and his two financial advisors can determine what the shares are worth then maybe he should suspend trading on it until they decide who the 30 BTC belongs to and what value the fund/shares have.

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.

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[Deprived]

Will wait until usagi has answered the actual questions (which are at the end of my post with the helpful title of "QUESTIONS") rather than ones I didn't ask.  He's posted some related things in his FAQ whilst dodging the actual questions of course.

It appears the claim is now that it was just an error made in the spreadsheet AFTER the last audited reports were published.  Given that was only a a few days ago it seems strange that a post would be made announcing as great news that a mistake had been made and corrected without any actual impact on anything.  Guess it's kind of cool that usagi can forget the fund had 30 BTC cash then get reminded of it by a financial advisor.

It still does leave the question of who the 30 BTC belongs to: any clear answer to that will put the lie to a previous statement by usagi so don't expect a clear answer obviously.

Post by usagi deleted as all it did was refer back to his thread for answers.

[jjdub7]

The basic part of the shares should be worth literally 1/10 of an oz of silver, which is trading around $23 right now.  Therefore, what I'll refer to as the "intrinsic" value of the security is defined by this value.  There's also a speculative value associated with the shares, as Usagi pays out revenue derived from other options and securities trading in secondary markets. 

Seeing as Usagi has already paid out over 30BTC in total revenues (and yes, that's more than 30BTC to shareholders other than himself), its obvious that there is in fact revenue, as opposed to this being a pyramid scheme.

So to answer your question, the shares are worth two things: the market price you can fetch for the share itself or the market price you can fetch for the silver reserve backing the share.  The shares are only "worth" what other people will pay for them, remember...

[jjdub7]

In terms of the underlying backing asset:

Silver closed trading at $24.72 today, meaning that 1/10th of an oz is valued at $2.472 (~$2.47).  At the current USD/BTC rate of $132/BTC, this leaves us with a spot market value of 0.01872727 BTC per share, which is around 0.05 lower than the current highest bid. 

Investors are obviously willing to pay this premium for the shares based on the recent dividend history rather than invest in TU.Silver as a growth investment.  When it comes to BTC stocks, shareholders hold only the rights to profits, not to assets, although many issuers will make a verbal guarantee of assets if the underlying fund is liquidated.  While there should definitely be a separation of personal and business accounts, it does seem like usagi knows what he's doing.  The TU fund is one of the few that consistently provides investors with newsletters, which can also contribute to the higher price of the asset (investors are willing to pay a higher price for an asset they consider lower risk - see the ZigGap situation for a contrasting reference).

So the "book value" doesn't really matter, just like it doesn't matter in world markets.  That's why there's such a high variation between P/E ratios of competitors in many sectors...investors on both the buy and sell side determine the price, rather than any specific mechanism.

[Deprived]

In terms of the underlying backing asset:

Silver closed trading at $24.72 today, meaning that 1/10th of an oz is valued at $2.472 (~$2.47).  At the current USD/BTC rate of $132/BTC, this leaves us with a spot market value of 0.01872727 BTC per share, which is around 0.05 lower than the current highest bid. 

Investors are obviously willing to pay this premium for the shares based on the recent dividend history rather than invest in TU.Silver as a growth investment.  When it comes to BTC stocks, shareholders hold only the rights to profits, not to assets, although many issuers will make a verbal guarantee of assets if the underlying fund is liquidated.  While there should definitely be a separation of personal and business accounts, it does seem like usagi knows what he's doing.  The TU fund is one of the few that consistently provides investors with newsletters, which can also contribute to the higher price of the asset (investors are willing to pay a higher price for an asset they consider lower risk - see the ZigGap situation for a contrasting reference).

So the "book value" doesn't really matter, just like it doesn't matter in world markets.  That's why there's such a high variation between P/E ratios of competitors in many sectors...investors on both the buy and sell side determine the price, rather than any specific mechanism.

The book value does matter as :

1.  It's presumably what you'd get if the shares were liquidated.
2.  It's the only measure you have to determine what the likely income from investments etc will be.  If usagi has 30 BTC more cash to invest then obviously that should raise expected income.
3.  The most important reason to know it is to know what price the fund would be selling shares at now - so as to know whether to buy from others or wait.  According to the contract shares are sold at the spot price of silver plus a small markup.  That part of the contract was being ignored (unless 200%+ is a 'small markup') - but it seemed usagi was trying to correct that.
4.  At what price could you rely on the fund buying back your shares if the other bids vanished?

The fundamental issue behind it all is that usagi wants to run an investment fund but pretend it's a silver shop.  That leads to shares being sold at a price that isn't consistent with selling silver (for the sort of markups being charged I could go buy physical silver with cash with zero delivery time, counter-party risk or fees) but without any published valuation consistent with an investment fund.  So it ends up being neither.

It's all fine and well saying 'investors can pay a share to see what their shares are worth' - but how is that of use to someone who isn't an investor and wants to invest or trade the shares?

So you tell me if you have a clue what usagi is doing:

1.  What price would usagi be selling shares at now if the fund had some spare to sell?
2.  What does each share actually own?
3.  If the answer to 2. is just "1/10th oz of silver" then do the shares have any rights at all to income from cash they don't own? (i.e. the majority of the cash raised from the sales of shares this week).

If usagi's plan is to personally keep all cash raised from sale of shares but give out dividends based on what they raise (but with NO obligation to do so) then he should come clean and say so.  Until then it just remains YOUR guess that's what he's doing - in previous reports it was clear the investment capital belonged to the share-holders.  You seem to say he now personally owns it (by saying the shareholders don't).  That's scary - as he's not even making an effort to repay all Nyan.A investors (which he personally took respondibility to do - but recently lied and denied making such a statement despite not having deleted it), but now people are supposed to trsut his goodwill without even a promise?

Interesting though your speculation is, it doesn't match what he said before.  Which doesn't mean you're wrong - it would be out of character for his current position to be consistent with his past statements (he's recently lied about a post he made earlier the same day - claiming he didn't say something when he clearly did 2 posts up in the same thread).

I'm also not that interested in speculative defences of usagi's position.  He can either clearly state what is and isn't the case - or not bother if he believes it isn't information anyone is entitled to know.

[cusdog]

Since usagi seems comfortable with me answering these types of questions:

There are indeed currently two separate and identifiable asset bases for the fund, a silver-based one and an "other". I have just completed a quantification for a clean split of the two as of March 31st and will, by the 1st or 2nd, have done the same for April 30th. At that point I will provide Usagi with the compiled comparative financial statements (and hopefully to the public) and with that information in hand I leave it up to him how to proceed. I foresee three possible courses of action although the ultimate decisions is up to Usagi and other shareholders:

1) All assets in the "other" are disposed of and a dividend for their value is paid out. The NAV would therefore mimic strictly the silver holdings

2) Some assets in the "other" are kept while the rest is disposed. The value of the "some" is what is predicted to be needed to finance (through interest and other income) the ongoing fees for the fund so that there is no NAV degradation which would occur in the event of a pure silver fund due to management and transaction costs.

3) No "other" assets are disposed and the stock remains a hybrid of about 50% silver and 50% other.


Deprived, I respect your analysis and position both in this case and in other threads where I have seen you. You have a good grasp of things. However, you are being needlessly combative towards Usagi. I don't pretend to know what the backstory is between you to, but this does not seem to be the place to play it out. Sorry if I come across as somewhat rude.

[jjdub7]

Deprived:

1 - None of this matters because usagi is not legally bound by any financial laws.
2 - If usagi releases more shares, the price should be determined by an indicator such as the 90-day weighted moving average.
3 - As usagi functions as our "board of directors", its up to him to decide whether to reinvest the 30 BTC or distribute it to the shareholders.

It seems like he's addressed the accounting errors in the main asset thread.  As for the pricing of additional shares, they should be sold at a premium to maintain the price integrity of the existing shares.

Edit:  While usagi is not bound by financial or regulatory law, he holds a significant stake (around 25%) in the company's "equity" (technically rights to profit-shares, as TU.Silver is not a business entity and shares "do not represent real world holdings" etc etc).  Therefore it's in his best interests to make the best decisions regarding the reinvestment of funds, and I trust this will remain the case.

[jjdub7]

Or really, additional shares should be sold at auction.

[Deprived]

Since usagi seems comfortable with me answering these types of questions:

There are indeed currently two separate and identifiable asset bases for the fund, a silver-based one and an "other". I have just completed a quantification for a clean split of the two as of March 31st and will, by the 1st or 2nd, have done the same for April 30th. At that point I will provide Usagi with the compiled comparative financial statements (and hopefully to the public) and with that information in hand I leave it up to him how to proceed. I foresee three possible courses of action although the ultimate decisions is up to Usagi and other shareholders:

1) All assets in the "other" are disposed of and a dividend for their value is paid out. The NAV would therefore mimic strictly the silver holdings

2) Some assets in the "other" are kept while the rest is disposed. The value of the "some" is what is predicted to be needed to finance (through interest and other income) the ongoing fees for the fund so that there is no NAV degradation which would occur in the event of a pure silver fund due to management and transaction costs.

3) No "other" assets are disposed and the stock remains a hybrid of about 50% silver and 50% other.


Deprived, I respect your analysis and position both in this case and in other threads where I have seen you. You have a good grasp of things. However, you are being needlessly combative towards Usagi. I don't pretend to know what the backstory is between you to, but this does not seem to be the place to play it out. Sorry if I come across as somewhat rude.

Well I'm glad to here the two parts are being split up.

I did, after all, say precisely that ages ago when it became apparent to me that was the underlieing problem with the security - that it was neither one thing or the other.

In fairness the problem arose because usagi wanted to avoid a problem with some other silver securities - that the quantity of silver per share would tend to fall over time due to management fees and/or costs of storage etc.  The problem for any PM fund manager is how to generate revenue from people who just buy and hold the silver, generating no income but still requiring maintenance.  The solution chosen was, however, in my view about the worst of both worlds.

To avoid paying for shipping, investors have to instead pay for the capital needed to generate income to pay for shipping.  So to avoid paying for a $2.50 stamp they have to instead buy $50 worth of shares in the post office.  Similarly for storage.  The cure is worse than the problem it attempted to address.

This was all perfectly obvious from the start of course - but not to usagi.  Similarly with his ill-conceived plan to sell CALL options on the silver - which could never work properly when you have to write options vs shares and the shares don't just represent silver (plus you can't write CALLs on the silver actually backing shares without issuing new shares to write options on which they breaks the contract's obligation to hold 1/10th oz of silver per share).

What you aren't aware of in terms of history is that usagi still has half a dozen securities open that have failed/gone bust/are in an extended period of close-down.  You're also unaware of some of his past rather shabby behaviour - such as clearly abusing his position of trust in one company (BMF) to the advantage of another (CPA).  Then denyiing there was any conflict of interest and giving conflicting accounts of the reason why the dubious decision was made.  Eventually he DID admit there was a conflict of interest - but not until AFTER he'd made a scam accusation against me that I was attempting to somehow cause him harm by lieing : one example of the supposed lies being my claim that there was a conflict of interest.

Taken individually his posts tend to seem sensible, straight-forward etc.  The problem comes when you start comparing what he says now about something to what he claimed/promised in the past.  Then you inevitably find that he's not actually doing what he said he would do.  As happened here - where the claim was he was running a silver fund yet it soon turned into something rather different.

As for moving forward with the fund, before looking at detail of what to do with current assets the first stage is to decide what the purpose is.  Is it :

a)  A silver shop
b)  A means for investors to own silver without having to physically possess it
c)  An investment fund which mainly holds PMs.
d)  An investment fund that happens to hold a bit of silver.

There's a distinct difference between the requirements of a) and b) - and it's pretty hard to do BOTH well in one vehicle.

Usagi's original plan COULD have been done decently - but it would have needed two (or even three - there's an argument for a security that is purely used for option execution) securities not one.  But I'm not sure just how keen any exchange would be to list an investment fund run by usagi until he's closed down the 4-5 (depending if you count CPA or not) investment-holding securities or so he currently still has open but largely neglected.

[Deprived]

Or really, additional shares should be sold at auction.

Really the silver should be seperated from the rest of it - which it seems usagi is finally accepting.

Here's what I said over a month ago (after the first report was poduced for it).  I can't quote direct as it's in a usagi thread - so obviously locked.

Somewhere you've managed to get yourself totally confused over the whole purpose of your Silver Fund.

You're trying to accomplish two objectives with a single security - and the two objectives are incompatible.

Those two objectives being:

1.  To sell ownership of silver and allow redemption of such ownership into physical silver via redemption of shares at a competitive price.
2.  To try to make a profit for investors and increase share value.

Why are they incompatible?  Simple.  Imagine a scenario where each share in your fund is backed by 1 unit of silver and X BTC.

If you sell shares at below the value of 1 unit of silver + X then by doing so, you immediately lose value for existing invetsors by dilution.
But if you try to maintain value for investors then that means your selling price has to be raised by X per share above the cost you could otherwise sell at.

And, of course, if someone redeems shares for silver then have to forfeit the extra X BTC that each share was nominally worth.

That's the problem when you try to use a single security to represent both a fixed-price asset (silver) and also ownership of the profits/losses/equity/debts of a business.  There should be two securities for it - a fund which just has 1 unit = 1 bit of silver and a company which buys/sells the silver, sells options (if you're still going with that idea - you rarely stick with one plan for long) and handles the management.  Then the units can be sold at good price and any profit gos to the company issuing the units.

Link to original post : https://bitcointalk.org/index.php?topic=137459.msg1627088#msg1627088

Seems like usagi is finally realising I was right.

[ldrgn]

Do you have any proof of any of your suspicions or allegations?  If so, please, by all means, post them here along with a specific step-by-step explanation of why you think you have standing.

I see you're a new-ish member here.  These allegations against TU.SILVER were made and described at length in the now-locked old Silver thread.

For endless discussion of Usagi's previous businesses, see this thread and this thread.  Another independent forum member just like you wanted to get to the bottom of the whole mess and did his own investigation in this thread as well.  That last thread is concisely written and well-organized and has responses from both Usagi and the accusers.  It's a good place to start.

[Deprived]

Do you have any proof of any of your suspicions or allegations?  If so, please, by all means, post them here along with a specific step-by-step explanation of why you think you have standing.

I see you're a new-ish member here.  These allegations against TU.SILVER were made and described at length in the now-locked old Silver thread.

For endless discussion of Usagi's previous businesses, see this thread and this thread.  Another independent forum member just like you wanted to get to the bottom of the whole mess and did his own investigation in this thread as well.  That last thread is concisely written and well-organized and has responses from both Usagi and the accusers.  It's a good place to start.

Removed all jjdub7's recent posts as he's clearly a supporter of usagi and didn't address the questions in the topic.  There's a seperate thread run by usagi for posts that believe he's doing a great job.  I've left the earlier posts as they had some merit.

If nothing else I hope this thread shows how stupid it is to allow asset issuers to run self-moderated threads where they can delete questioning posts - forcing seperate threads to raise the questions in.

[burnside]

Deprived, I respect your analysis and position both in this case and in other threads where I have seen you. You have a good grasp of things. However, you are being needlessly combative towards Usagi. I don't pretend to know what the backstory is between you to, but this does not seem to be the place to play it out. Sorry if I come across as somewhat rude.

Deprived's approach is reasonable when considering the disappearing posts in the official thread and how hard it has been to get a straight answer.  Most of the deflection lately has been toward you and DeaDTerra, so it's good to have you involved.

[EskimoBob]

Any ideas what happened to BMF's:
3 BF Singles 832 MH/s
2 BitForce Jalapenos 3.5 GH/s
1 BitForce 'SC' Single 40 GH/s

Have those assets become a part of this new shiny SILVER'i adventure of his?

[Deprived]

Any ideas what happened to BMF's:
3 BF Singles 832 MH/s
2 BitForce Jalapenos 3.5 GH/s
1 BitForce 'SC' Single 40 GH/s

Have those assets become a part of this new shiny SILVER'i adventure of his?

Some of them the orders were refunded and the proceeds apparently paid out.

Usagi recently claimed that with one of them BFL lost the order or something - but that claim was only made in a post in a totally unrelated thread (for one my assets) and hasn't been reported to investors.  Obviously that's not the one that was sold off and the proceeds given to CPA to pay its debts - that was an entirely seperate one that was owned by usagi personally (despite him having previously said it was BMF's and that the proceeds from its sale were part payment of the funds owed to CPA).

Noone will know for sure what happened with the hardware Unless/until usagi produces proper up to date records of what happened to the assets of his various companies.  That includes CPA - which can't remain a black box when it's in liquidation and has assorted creditors including yourself ( All Nyan.a investors are owed money by CPA - so if funds raised from CPA's assets are going to other creditors with senior claims then those creditors, assets and payments need to be published.)  The nyan.a debt wouldn't have been an issue if usagi had actually intended to keep his commitment to personally repay nyan.a investors - but as I pointed out in a recent thread he's now lieing about ever having made that promise (even though he never deleted the post in which it was made - so the lie is rather obvious).

Really your post (and my response) should go in a thread for BMF/etc but I don't think there's any unlocked ones.  So it may as well stay here to avoid clogging the board up with more usagi threads.

I guess the questions for usagi in respect of the hardware are:

1.  Where's a list of the hardware owned by BMF?  A link to it is fine - no need to repost.
2.  Where are records of which ones were sold - and when that payment was passed on to investors?
3.  Why haven't shareholders been told about a BMF SC totally vanishing?
4.  If BFL are refusing to acknowledge an order made by BMF then what steps are being taken to address that?

Here's the quote from usagi in relation to questions 3/4.

What do I want you to do?  Pretty simple:

BMF:  Produce a proper accounting of what happened to all assets, ESPECIALLY the mining hardware and the funds raised from them.  If there's still significant assets left then, with proper info on what assets the shares have, I don't personally object to BMF being traded provided you dividend out further funds as they're received.  Right now I (and others) believe there's some very dubious crap going on over the hardware - and that some hardware listed as belonging to the company before GLBSE shutdown has vanished without trace.

Done. See the final claims thread esp. the spreadsheets showing the payment of all funds refunded by BFL to shareholders.
There is still one BFL single for which BFL has ignored multiple requests to provide a shipping number. I think they walked off with it.

I'm not sure which spreadsheets he refers to in his quote there - or which locked final claims thread it's in (and I'm not going to wade through them all trying to find it - couldn't see it in the OP of the last thread he used which is where there's a bunch of out of date/neglected data about BMF assets).

[jjdub7]

I know I've already been removed from this thread, but suggestion to usagi...could you use some of the excess 30 BTC or so to purchase shares in mining bonds to diversify TU.Silver's portfolio?  With that additional revenue, you'd be able guarantee the issuance of regular dividends and investors will also have some sense of what the shares are worth from a practical, day-to-day standpoint as well as have the confidence that they're also backed by actual physical shares of silver.

I think this is a suggestion many people could agree upon, and although investors would not see any of the 30 BTC directly, they would be able to see dividends in the coming weeks (i.e. just like pass-through's of ASICMINER-PT shares like DeaDTerra's).  I, for one, believe that ASICMINER is overpriced right now though, so would it be possible to hold a shareholder vote on this or another plan of action?

Hopefully a solution like this will be able to make everyone happy.

[jjdub7]

And Deprived, don't get me wrong.  We do appreciate people asking the tough questions like this.

[jjdub7]

Usagi & Deprived:

I've been thinking...because the shares are backed by silver, the price is going to still be pegged to the dollar.  So as the value of BTC goes up, the shares are going to devalue because they're priced in BTC.  Therefore investing in mining bonds would be a solid way to go to hedge against this kind of devaluation.  If BTC were to decrease in value, the result would be even better returns.

[burnside]

Usagi & Deprived:

I've been thinking...because the shares are backed by silver, the price is going to still be pegged to the dollar.  So as the value of BTC goes up, the shares are going to devalue because they're priced in BTC.  Therefore investing in mining bonds would be a solid way to go to hedge against this kind of devaluation.  If BTC were to decrease in value, the result would be even better returns.

Seems like investors would be best served with two assets so that they can mix and match whatever exposure they want.

TU.SILVER (100% silver backed asset, nothing but a silver backstop.)
NYAN.2013 (The Usagi 2013 Fund)

Would definitely simplify things a bit, maybe eliminate some confusion?

[jjdub7]

Usagi & Deprived:

I've been thinking...because the shares are backed by silver, the price is going to still be pegged to the dollar.  So as the value of BTC goes up, the shares are going to devalue because they're priced in BTC.  Therefore investing in mining bonds would be a solid way to go to hedge against this kind of devaluation.  If BTC were to decrease in value, the result would be even better returns.

Seems like investors would be best served with two assets so that they can mix and match whatever exposure they want.

TU.SILVER (100% silver backed asset, nothing but a silver backstop.)
NYAN.2013 (The Usagi 2013 Fund)

Would definitely simplify things a bit, maybe eliminate some confusion?

Perhaps an equitable solution would be a 2-for-1 split.  Take the entire balance sheet for TU.Silver, separate out a part of the money, and use it to establish a new NYAN fund and then divide the shares into separate funds.  People who want to keep the 1:1 share ratio can do so and those who want to stick with or leave the silver-backed asset can sell off their shares and buy into the other fund.  This would involve moving some money around on the part of investors, but hopefully it could smooth out any speculative problems.

Also, for the TU shares, could we hold a shareholder vote to set a reinvestment parameter for revenues?  It could be good to set (on a quarterly basis) a breakdown of what parts of the cash flow should be paid out as dividends and which parts should be reinvested in additional silver.  Newly bought silver should either A) be sold at auction at a price no lower than the 90-day average (or similar) or B) be reserved on the company balance sheet until such a time when a 2:1 split of silver shares can be issued.