ASICMINER Speculation Thread

[Vycid]

Well, if I was going to try and do better,  I'd probably start by spending the bitcoins I collected with the intention of spending.

You think you could improve friedcat's business? You are delusional.

Either you are consistently and intentionally misinterpreting very clear statements,  or you have the reading comprehension of a first-grader.

What are you going to spend them on genius? You have next to no knowledge of the development and manufacturing plans.
So by trying to do better you would not be attempting to improve the business?

I do not think I could improve his business. I am not a businessman. There is quite possibly a problem that I could not fix that will make Gen 2 late.

I am saying - clearly, I believe - that if I (or anyone) was to meet December delivery,  these would be some of the things that need doing.

Based on FC's wallet, they have not been done.

Anything else you'd like to misinterpret?

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[Vexual]

Anything else you'd like to misinterpret?

You could clarify one more thing for me...
As a semiconductor process engineer, what was your role?
Now this is pure speculation from my own imagination(a disclaimer you are free to use), but did you sit at a pick and place machine, and call the supervisor if any lights started flashing?


I'm sure he got sick of you calling him BEFORE the lights started flashing, with a hunch.

[Vycid]

Anything else you'd like to misinterpret?

You could clarify one more thing for me...
As a semiconductor process engineer, what was your role?
Now this is pure speculation from my own imagination(a disclaimer you are free to use), but did you sit at a pick and place machine, and call the supervisor if any lights started flashing?


I'm sure he got sick of you calling him BEFORE the lights started flashing, with a hunch.

LOL. You're not even close. I do process development for wafer fabrication equipment - I can't get much more specific than that without giving away my company, which I am not inclined to do (there are only a handful of WFE companies in the world).

Suffice to say I was involved with the engineering development of equipment that has touched almost every modern electronic device you own (which is a natural consequence of there being only a handful of WFE companies I suppose).

And I actually get paid to express my hunches about problems. Was that what you wanted to know?

[runeks]

So, Vycid, have you exercised your puts yet or are you waiting still?

I've got some 3.2 puts expiring in a month that I'm unsure of whether I should exercise now or wait a bit longer.

[101111]

Well, if I was going to try and do better,  I'd probably start by spending the bitcoins I collected with the intention of spending.

You don't know what arrangements and deals FC has in place, or with whom, so STFU.

[Vexual]

Was that what you wanted to know?

Sure, sounds interesting.
I was really only asking to include my snide remarks

[velacreations]

Based on FC's wallet, they have not been done.

I think this is where you went wrong.  You don't know what those funds are for.  Sure, they MIGHT be for production, or they might be something else.

[glendall]

Based on FC's wallet, they have not been done.

I think this is where you went wrong.  You don't know what those funds are for.  Sure, they MIGHT be for production, or they might be something else.

Well, no shortage of speculation in this speculation thread.

[Vycid]

So, Vycid, have you exercised your puts yet or are you waiting still?

I've got some 3.2 puts expiring in a month that I'm unsure of whether I should exercise now or wait a bit longer.

Definitely don't exercise them if they've still got a month to exp. They've got Black-Scholes value, so you can get more money by selling them than exercising them. Your decision to sell depends on your own investment thesis, naturally.

I have not exercised, except for in-the-money options about to expire (only a couple of those). My price target is still 1.5 BTC.

Based on FC's wallet, they have not been done.

I think this is where you went wrong.  You don't know what those funds are for.  Sure, they MIGHT be for production, or they might be something else.

Absolutely. I don't know what else they might be for, especially since FC was unwilling to use those funds instead of siphoning from dividends (perhaps they are his personal funds and do not belong to AM?).

But this alone is not the reason for my bearish outlook - it's just another piece of evidence in a big puzzle.

Well, if I was going to try and do better,  I'd probably start by spending the bitcoins I collected with the intention of spending.

You don't know what arrangements and deals FC has in place, or with whom, so STFU.

"You're speculating in a speculation thread, how dare you do such a thing."

Choke on a dick.

[Vexual]

I don't know what else they might be for, especially since FC was unwilling to use those funds instead of siphoning from dividends (perhaps they are his personal funds and do not belong to AM?).

But this alone is not the reason for my bearish outlook - it's just another piece of evidence in a big puzzle.

Even if they are for expenses, why say "spend it now!"?
You're a fucking idiot, he will pay his bills when he needs to.
The company has a good amount of working capital, and you think thats bad?

[Vycid]

I don't know what else they might be for, especially since FC was unwilling to use those funds instead of siphoning from dividends (perhaps they are his personal funds and do not belong to AM?).

But this alone is not the reason for my bearish outlook - it's just another piece of evidence in a big puzzle.

Even if they are for expenses, why say "spend it now!"?
You're a fucking idiot, he will pay his bills when he needs to.

Didn't we JUST have this conversation? He needs to spend that money now if he wants to make his Gen 2 deadlines.

Perhaps he HAS spent some of it. I'll look through the recent history for that address.

Edit:

This transaction is significant, I think - http://blockchain.info/tx/51de795ea7c7f56f24389dbc44a46a9804638fb9eef895a3fc547f14a36f4407

The total sent is ~$400,000. Trouble is, I can't make any sense of where it went. It looks almost like it went through a coin mixing service. There are tons of addresses through which most of the money went, with the remainder ending up here: http://blockchain.info/address/19jCc77eCEK1VNcHnjLVeAzLJvmedRPCJP

If anyone better at blockchain analysis can figure this out, I'd be grateful.

[Vexual]

Didn't we JUST have this conversation? He needs to spend that money now if he wants to make his Gen 2 deadlines.

Perhaps he HAS spent some of it. I'll look through the recent history for that address.

All we know is ASICMINER is well funded. If you think friedcat is dragging his heels with the next gen of chips, I'd say you're wrong.

[Vycid]

Didn't we JUST have this conversation? He needs to spend that money now if he wants to make his Gen 2 deadlines.

Perhaps he HAS spent some of it. I'll look through the recent history for that address.

All we know is ASICMINER is well funded. If you think friedcat is dragging his heels with the next gen of chips, I'd say you're wrong.

They're well-funded, but that doesn't mean they can't have reasons not to spend money. Like if their chip isn't working in simulation, for example.

It's just weird, is all. There may be a benign explanation, but I'd have expected FC to have spent more of his war chest by this point.

[Vexual]

Even if there were delays with the next gen chips, and there's nothing solid to say there are, the current gen is still profitable.
Irrespective of shareprice and the risks they face, I think you might agree ASICMINER is a pretty sweet operation. Perhaps not invincible (I think something may have been lost in translation there,) but still in an enviable position for the future.

[Vycid]

Even if there were delays with the next gen chips, and there's nothing solid to say there are, the current gen is still profitable.
Irrespective of shareprice and the risks they face, I think you might agree ASICMINER is a pretty sweet operation. Perhaps not invincible (I think something may have been lost in translation there,) but still in an enviable position for the future.

I agree, absolutely, 100%. ASICMiner is not just the best Bitcoin mining business I have yet seen, it is the best Bitcoin business. Period. Friedcat is a gifted businessman and an honorable person.

It's also still overvalued and I've made a ludicrous return on my short position. We're talking about a company that was nearly worthless at the beginning of the year and was recently valued at something like $250 million (@ 5BTC/share). It's hard to imagine that it WOULDN'T overshoot fair value with growth like that.

And even at the current market cap of ~900,000 BTC, it is clearly overvalued just by the simple fact that there are only ~1M BTC that can be mined per year, and competition IS coming regardless of Friedcat's business acumen. No industry can maintain margins above 20-30%, certainly not one with barriers to entry in the <$2M range.

I maintain a price target of 1.5 BTC. In my mind, that is actually a fairly generous target from a fundamental standpoint. I believe in Friedcat, I just believe in math and free-market competition even more.

[JimiQ84]

there are 1,36M minable coins per year, with assumption of zero rise in difficulty (difficulty rises because there are more than 2016 blocks in 2 weeks) and with assumption of zero fees. Also - selling business uses coins that are already mined. Stop spreading bullshit, please.

[stripykitteh]

I agree, absolutely, 100%. ASICMiner is not just the best Bitcoin mining business I have yet seen, it is the best Bitcoin business. Period. Friedcat is a gifted businessman and an honorable person.

...

I maintain a price target of 1.5 BTC. In my mind, that is actually a fairly generous target from a fundamental standpoint. I believe in Friedcat, I just believe in math and free-market competition even more.

That's the thing that a lot of investors in ASICMiner can't grasp or don't think is important. Just because something is well-run by a capable businessman, doesn't make it impossible for it to be overvalued. Not too many Vycid-critics have made a stab in public at what they think fair value is. It would be fascinating if they did, even more so if they explained how they reached their answer. It might even raise the level of discourse.

Valuation might not matter in the short-term, but in the long-term it always does.

[Vexual]

Also worth noting when considering ASICMINER's "market cap", is that many of those shares will likely never change hands.

[Vycid]

there are 1,36M minable coins per year, with assumption of zero rise in difficulty (difficulty rises because there are more than 2016 blocks in 2 weeks) and with assumption of zero fees. Also - selling business uses coins that are already mined. Stop spreading bullshit, please.

1) Sorry if ~1M was too inaccurate. 1.36M it is.

2) There is nothing to suggest that fees will be a substantial part of the equation. If fees do become a substantial part of the equation within the next couple of years, it will probably be because Bitcoin has become mainstream, and AM will not yet be ready to compete with companies like Intel or IBM if that happens.

3) "Also - selling business uses coins that are already mined" - I'm not sure what this means. If you think people are going to intentionally buy hardware at a loss, you're kidding yourself. Using a hardware sales based business model REDUCES potential revenue.

If we assume the simple model that AM attains and maintains 20% of the hashrate for another year, at an average of 75% margin (excellent and unlikely, in my opinion), drops to 30% profit margin (still maintaining 20% of the hashrate) for the year following, and to 20% margin for the next 8 years (again, at 20%), this is the breakdown of total BTC profit (remember that the block reward halves in approximately 3 years, then again approximately 4 years after that, and again 3 years after that):

Year 1: 0.2 * 0.75 * 1.36M = 0.204M
Year 2: 0.2 * 0.3 * 1.36M = 0.0816M
Year 3: 0.2 * 0.2 * 1.36M = 0.0544M
Year 4-7: 4 * 0.2 * 0.2 * 1.36M/2 = 0.1088M
Year 8-10: 3 * 0.2 * 0.2 * 1.36M/4 = 0.0408M

Net profit, ten years forward (reasonable estimate of fair market cap for most companies): 0.4896M BTC = 489.6k BTC

Current market cap: ~2.25 * 400000 = ~900000 BTC

Market cap at my price target of 1.5 BTC: 1.5 * 400000 = 600000 BTC

So you can see I'm actually modestly optimistic.

This model excludes transaction fees, as I believe they will either be negligible or accompanied by stiffer competition. You can adjust it with your own projections if you desire.

[lophie]

Any one knows the news on Bitfunder's G.ASICMINER-PT? No posts from Ukyo in a couple of days now. Alot of shares waiting to be withdrawn by me and others with no update . The scary part is we don't know if Friedcat will credit us the shares if Ukyo pulled a Nefarious on us! I really don't think he would but can't deny I am pretty much scared of the situation!