P/B ratio, or how to not get raped in the Bitcoin securities markets

[EskimoBob]

While the details may be a little off, the concept itself is useful in many places.

On the other hand you've missed out perhaps your best example possible: S.MPOE book 0, mkt cap ~780,000 BTC. 

Another important and quite Bitcoin-specific point is the Cost of Book. Ie, a company with 10k BTC worth of gear (call it SkepsiDyne in loving memory of the Global Scam Exchange) is actually to be discounted with the CP risk of the op, because the higher the book gets, the more heavily it weighs on the operator. Even small operations (take Usagi's now famous few-hundred BTC lolsecurities, or EskimoBob's Art pseudoasset) suffer from the same problem (as obviously you can find consciences for sale at any price).

LOL! Popcorn time. This comedy is getting funnier.

[Peter Lambert]

While the details may be a little off, the concept itself is useful in many places.

On the other hand you've missed out perhaps your best example possible: S.MPOE book 0, mkt cap ~780,000 BTC. 

Another important and quite Bitcoin-specific point is the Cost of Book. Ie, a company with 10k BTC worth of gear (call it SkepsiDyne in loving memory of the Global Scam Exchange) is actually to be discounted with the CP risk of the op, because the higher the book gets, the more heavily it weighs on the operator. Even small operations (take Usagi's now famous few-hundred BTC lolsecurities, or EskimoBob's Art pseudoasset) suffer from the same problem (as obviously you can find consciences for sale at any price).

LOL! Popcorn time. This comedy is getting funnier.

Right, pop some popcorn. EskimoBob, she is insulting you, are you just going to take that?

[EskimoBob]

While the details may be a little off, the concept itself is useful in many places.

On the other hand you've missed out perhaps your best example possible: S.MPOE book 0, mkt cap ~780,000 BTC. 

Another important and quite Bitcoin-specific point is the Cost of Book. Ie, a company with 10k BTC worth of gear (call it SkepsiDyne in loving memory of the Global Scam Exchange) is actually to be discounted with the CP risk of the op, because the higher the book gets, the more heavily it weighs on the operator. Even small operations (take Usagi's now famous few-hundred BTC lolsecurities, or EskimoBob's Art pseudoasset) suffer from the same problem (as obviously you can find consciences for sale at any price).

LOL! Popcorn time. This comedy is getting funnier.

Right, pop some popcorn. EskimoBob, she is insulting you, are you just going to take that?

No, Peter. As you can see, Mr Dipshit (or his sockmuppet aka PR scank) is making a complete fool out of him/her self. Let her write more BS and brag about his/her delusions. You are welcome to join them, btw. I bet you are good at it.

[EskimoBob]

While the details may be a little off, the concept itself is useful in many places.

On the other hand you've missed out perhaps your best example possible: S.MPOE book 0, mkt cap ~780,000 BTC. 

Another important and quite Bitcoin-specific point is the Cost of Book. Ie, a company with 10k BTC worth of gear (call it SkepsiDyne in loving memory of the Global Scam Exchange) is actually to be discounted with the CP risk of the op, because the higher the book gets, the more heavily it weighs on the operator. Even small operations (take Usagi's now famous few-hundred BTC lolsecurities, or EskimoBob's Art pseudoasset) suffer from the same problem (as obviously you can find consciences for sale at any price).

MPOE-PR, can you please amuse forum readers with another number - S.MPOE shareholder's equity in BTC.

[furuknap]

Your hashpower is coming in 3 months.  Future hashrate is not worth as much as hashing today.

So when my hashpower comes, my P/B will be 1.1, right? That would make AMs P/B using the same formula be around 8.

Once again:  How much did you pay for your 120 GH/s ?  That is your book value.  If you massively overpaid for it, we can have a different discussion.

So because AM pays $10000/Ths, their book value is $620000. Trading at $150M means their P/B is around 240.

.b

[Peter Lambert]

Your hashpower is coming in 3 months.  Future hashrate is not worth as much as hashing today.

So when my hashpower comes, my P/B will be 1.1, right? That would make AMs P/B using the same formula be around 8.

Once again:  How much did you pay for your 120 GH/s ?  That is your book value.  If you massively overpaid for it, we can have a different discussion.

So because AM pays $10000/Ths, their book value is $620000. Trading at $150M means their P/B is around 240.

.b

Hmm, there is what they paid for it, and then there is what they could sell it for now. Those are not always the same thing.

[furuknap]

Hmm, there is what they paid for it, and then there is what they could sell it for now. Those are not always the same thing.

I tried using that approach too, but then it became about what you paid for it. When I tried using what I paid for it, it became a matter of the value of hashing power (completely independent of both what was paid and for what it could sell). Regardless, my asset has a much better P/B than AM.

Of course, this entire point is moot because my asset isn't a company, it is a contract, so a measure of P/B is about as useful as a comparison of gasoline prices to cab fare.

.b

[Entropy-uc]

Hmm, there is what they paid for it, and then there is what they could sell it for now. Those are not always the same thing.

I tried using that approach too, but then it became about what you paid for it. When I tried using what I paid for it, it became a matter of the value of hashing power (completely independent of both what was paid and for what it could sell). Regardless, my asset has a much better P/B than AM.

Of course, this entire point is moot because my asset isn't a company, it is a contract, so a measure of P/B is about as useful as a comparison of gasoline prices to cab fare.

.b

Again you fail to understand.

It is the value of the hardware.  Since you do not have that hardware in hand, it is the future value of hardware.  KNC has established that value at $20 / GH/s.

Now, if you can point to recent sales of future hardware orders significantly above that valuation we might have something worthwhile to discuss.

And again:  How much did you pay for your hardware?

[furuknap]

It is the value of the hardware.  Since you do not have that hardware in hand, it is the future value of hardware.  KNC has established that value at $20 / GH/s.

So now it's the value of the hardware, not what you paid. Can you ever make up your mind?

Now, if you can point to recent sales of future hardware orders significantly above that valuation we might have something worthwhile to discuss.

Yes, I can point to AM sales. What did they charge? $300/GHs?

Oh, but you're right! They're charging 30x what they paid _now_ so that's not ripping people off, but when I charge people 18x what I paid, it's ripping people off.

And again:  How much did you pay for your hardware?

I believe you have pointed links to the prices before, but the hardware price is $2160. Thus my sales price vs purchase price is around 18x, or around 60% of the markup your favorite stock company charges, and even that is after they dropped prices by 50%. Until a week ago, my price had 1/5 of the markup AM adds.

But that's OK because you get a cut, right?

.b

[furuknap]

Okay.  So your price to book is 18.  Good to know.

And ASICMiner price to book using the same rules is roughly 240. Also good to know, I guess.

.b

[furuknap]

Okay.  So your price to book is 18.  Good to know.

And ASICMiner price to book using the same rules is roughly 240. Also good to know, I guess.

.b

I'm not here to debate ASICMINER with you.

ASICMINER's IPO sold at a price to book of 2.  That is because all the investor funds went into the company, and the principals held 50% of the stock as sweat equity.  Today, I estimate the price to book of ASICMINER to be less than 3.  That is based upon valuing existing hash rate at 3 BTC / GH/s, and future hash rate at 0.2 BTC.

At almost 10x ASICMIMER's price to book, and 20x the cost of ASICs delivered in the time frame yours will arrive, it's obvious the security you are proposing is a bad deal.

There is no question that P/B isn't an absolute.  As I pointed out at the start, very low P/B value can be a bad deal.  And a company like facebook can be a great investment with a high P/B.

For mining investments it is a very good indicator.  ASICMINER is proof of that.

The entire history of bitcoin securities is a story of lost capital on investors part, with the sole exception of ASICMINER.  This will have to change if bitcoin is going to prosper.  Burnside and Uyko would do well to ban new issues of mining turds.

And the price to book for AMC is still 35.  Well over 10 times ASICMINER right now.

Hardly the 2 that ASICMINER sold at when they were raising funds, and certainly in no way comparable to the ~3 they are valued at today.  I wonder why you keep comparing yourself to Friedcat?

On valuation of AM and P/B:

62 TH/s at 3 B / GH/s, plus the 200 TH/s of hardware on the way, plus inventory of USB miners for sale, plus the business value of the sales of hardware.  P/B of 3 is probably low because I have know idea of the value of the capital equipment they have in terms of power supplies and cooling etc for the data centers.

I find P/B to be quite useful.  It told me that your hero Kslaughter is selling his penny stock scam at 20x the valuation that ASICMINER came to market at, and at least 10x their current valuation.

I was astonished when Erik claimed the 6100 BTC betting pool as his asset rather than SDICE's.  SDICE should have been the second big winner investment beside ASICMINER.  Instead it has become Erik's personal ATM.

ASICMINER has a price to book of ~3.  There is plenty of uncertainty about that number because there isn't a solid balance sheet to evaluate all the assets with.  That number is based upon 1) Valuation of the existing hashrate at 3 BTC / GH/s 2) The reported future hardware on order by ASICMINER at 0.2 BTC / GH/s, 3) an estimate of the inventory of USB miners and 4) a gross valuation of the value of the hardware sales business.

ASICMINER was selling hardware at ~3.9 BTC / GH/s until they ran out of blades.  Is that a good price?  I don't know.  It's certainly better than paying you 4 BTC / GH/s for a promise of hash power 3 months from now.

ASICMINER is far better than any comparable issue though.  They actually provide regular communications, pay like clockwork, and have a shareholder board.  Should they improve?  Absolutely yes.

Well, you could have fooled me...

You are trying to sell a contract for hardware you bought at an 1800% markup.

Have you no shame?

Obviously I have more shame than friedcat who sells hardware he bought at a 5000% markup (thats 5 thousand percent, or 50 times what he paid) when he sold AM Blades at 50BTC that he bough for around 1BTC each, for 10GHs. I obviously have more shame than friedcat who now proposes to sell hardware with a 3300% markup, when he's selling USB miners he bought for ~$3 for ~$100.

Look, we can do this dance all night, but no matter which rules you apply, my asset is priced far below AM in P/B. I've said it before, it is a moot point because my contracts isn't a company, but you can't really win this comparison.

.b

[TECHICENINE]

 I obviously have more shame than friedcat who now proposes to sell hardware with a 3300% markup, when he's selling USB miners he bought for ~$3 for ~$100.



that's wild!..please prove this ...a link to back this claim up would be awesome..thanks

[furuknap]

I obviously have more shame than friedcat who now proposes to sell hardware with a 3300% markup, when he's selling USB miners he bought for ~$3 for ~$100.



ok please prove this ...a link please would be awesome..thanks

Sure, here you go:

2. The final margin cost for 1TH/s is less than 10k$, the actual number depends on the volatile price of PCB components. Installing and power bill are currently low. We will be self-funded.

1TH=1000GHs=1000000mhs/300mhs per unit =3333 units.

$10000/3333 ~= $3/unit

As for price, here you go:

Minimum Order Volume of 50 USB sticks. Price of 0.99 each. 2% sent as redundancy (not in warranty). Shipping is free.

BTC0.99*$103 per BTC = ~$100/unit.

.b

[TECHICENINE]

u crazy man if a message board is what you are relying for your research~back up this claim with real data...thanks

[furuknap]

if a message board is what you are relying for your research to push this claim i feel bad for you..thanks

Come again? What makes you think you can't trust friedcat's own words? I certainly have found little reason to doubt what he says in most cases. I'm not agreeing with his claim that transaction fees must reach 25BTC by 2016 to keep Bitcoin safe, but I don't think he's saying that knowing it is a lie.

.b

[TECHICENINE]

if a message board is what you are relying for your research to push this claim i feel bad for you..thanks

Come again? What makes you think you can't trust friedcat's own words? I certainly have found little reason to doubt what he says in most cases. I'm not agreeing with his claim that transaction fees must reach 25BTC by 2016 to keep Bitcoin safe, but I don't think he's saying that knowing it is a lie.

.b

what does this have to do with your 3 dollar a unit claim...thanks

[furuknap]

if a message board is what you are relying for your research to push this claim i feel bad for you..thanks

Come again? What makes you think you can't trust friedcat's own words? I certainly have found little reason to doubt what he says in most cases. I'm not agreeing with his claim that transaction fees must reach 25BTC by 2016 to keep Bitcoin safe, but I don't think he's saying that knowing it is a lie.

.b

what does this have to do with your 3 dollar a unit claim...thanks

Did you not read this?

2. The final margin cost for 1TH/s is less than 10k$, the actual number depends on the volatile price of PCB components. Installing and power bill are currently low. We will be self-funded.

1TH=1000GHs=1000000mhs/300mhs per unit =3333 units.

$10000/3333 ~= $3/unit

[TECHICENINE]

do you know what DUE DILLIGENCE is it means you check and recheck the facts...thanks

[furuknap]

do you know what DUE DILLIGENCE is it means you check and recheck the facts...thanks

Can you please make a point?

.b

[TECHICENINE]

do you know what DUE DILLIGENCE is it means you check and recheck the facts...thanks

Can you please make a point?

.b

sure for you to be in this game you have to bring facts and links not just go quoting aliases off some message board...thanks