The coming flash crash in AMC

[Vbs]

I understand that there is always a good possibility that new assets are scams, but there has to be a line in the sand for considering that it may indeed not be a scam.

I only expect that once more confirmed info comes out about AMC, the first-impression of Ken being a scammer can be retracted.

Thinking everything is a scam/lie is just as bad as thinking everything is trustworthy.

Q: Why could I trust you?
A: In principle, like scientific theories, trustworthiness can only be
disproved. However some facts might contribute to more confidence: My ID, phone and email have all
been verified in GLBSE. I started running the fund called MU on GLBSE before it updated to version
2. I am also responsible for the GLBSE-listed bond MOORE.

[Entropy-uc]

I understand that there is always a good possibility that new assets are scams, but there has to be a line in the sand for considering that it may indeed not be a scam.

I only expect that once more confirmed info comes out about AMC, the first-impression of Ken being a scammer can be retracted.

Thinking everything is a scam/lie is just as bad as thinking everything is trustworthy.

Q: Why could I trust you?
A: In principle, like scientific theories, trustworthiness can only be
disproved. However some facts might contribute to more confidence: My ID, phone and email have all
been verified in GLBSE. I started running the fund called MU on GLBSE before it updated to version
2. I am also responsible for the GLBSE-listed bond MOORE.

I don't think it's a scam.  I think Ken intends to do what he says.  But if he succeeds, he will profit handsomely, and shareholders will see no capital gains, and greatly diluted dividends.  And even a few mis-steps will leave buyers at todays level (0.001 ) with losses.

Here's a few things Ken has done that Friedcat did not:

1.  Pass the IP paid for by stockholders to his own company in exchange for a pittance of a royalty
2.  Mark up the assets of his company 35x before offering shares
3.  Hire a PR person with a history of scamming people
4.  Claim that his company will mine more bitcoins than are available
5.  Post lies about his business relationships (e-ASIC is not a major semiconductor company by any metric)

[FloatesMcgoates]

Well guys, after sitting through various people in this thread launch attacks at each other in the official AMC thread not accomplishing anything, Me in combination with some other forum members seem to have had a constructive conversation with Kenneth and he now appears very likely to be merging AMC with VMC. This will likely cause the share price to rise quite a bit, as the merger is pure value added.


Now we just need someone to actually visit them onsite to ensure the operation exists, and then I believe that we would have ourselves an actual worthy company for us to invest in.

[ArcticWolf]

Well guys, after sitting through various people in this thread launch attacks at each other in the official AMC thread not accomplishing anything, Me in combination with some other forum members seem to have had a constructive conversation with Kenneth and he now appears very likely to be merging AMC with VMC. This will likely cause the share price to rise quite a bit, as the merger is pure value added.


Now we just need someone to actually visit them onsite to ensure the operation exists, and then I believe that we would have ourselves an actual worthy company for us to invest in.

Finally some actual forward momentum on the situation!
The official thread has devolved into name calling and wild speculation, good to see some actual constructive movement.

[auto2nr1]

It's good to see we are making progress after a few days of chaos on that thread. All the people wanted was a response and a step forward towards a resolution by Ken. As soon as Ken started typing away and responding all the posts have been positive.

#1 MERGE AMC/VMC OR FIND A WAY FOR THE HARDWARE/MINING BUSINESS TO COEXIST
#2 CREATE A CAP ON SHARES ISSUED TO PREVENT DILUTING OF SHARES

[Deprived]

It's good to see we are making progress after a few days of chaos on that thread. All the people wanted was a response and a step forward towards a resolution by Ken. As soon as Ken started typing away and responding all the posts have been positive.

#1 MERGE AMC/VMC OR FIND A WAY FOR THE HARDWARE/MINING BUSINESS TO COEXIST
#2 CREATE A CAP ON SHARES ISSUED TO PREVENT DILUTING OF SHARES

You're horribly misguided with point 2.

It's actually in the interest of shareholders for Ken to sell more shares.  You need to look carefully at who owns waht shares and what each share is entitled to - then maybe you'll agree.  Work out what share of profit you get now and what share of the company you own.  Then work it out again if more shares are sold (bear in mind those sales generate capital).  The results are NOT what you seem to think.

[Deprived]

An updated evaluation of profit sharing based on the FAQ:

VMC makes 1 BTC.

0.9 BTC is Kens

0.1 BTC goes to AMC and is further split up:

0.04 BTC to Ken
0.04 BTC to the reinvestment fund (for more free loans to VMC)
0.012 to the treasury fund
0.008 to shareholders

Summing it all up:

0.94 to Ken
0.052 to lend or buy more stuff from VMC
0.008 for the people who paid for, and risked everything.

Of course, as Deprived pointed out all of that depends on VMC making a profit, which is up to Ken's to use Hollywood accounting to skim the profits before they see the balance sheet.

Actually looking at the new FAQ it appears he's not taking quite so much now.  AMC it getting 10% of gross not net.

That he can change the terms at all (even in the favour of investors) shows just how bent the whole scheme is.  Things like the split of profits should have been subject to a signed contract before they were ever announced in the first place. He seems to have changed the split of cash and also changed it from AML lending the money to VMC to produce the chips to AML doing it itself (but, wierdly, VMC doing the negotiating with manufacturers - which makes little sense).  That change isn't necessarily a good thing - as it essentially protects VMC from taking any of the loss if things go wrong (I'd assume the change was made so AMC had no claim on VML if $1 million profit never arrived to repay the capital).

Unfortunately a LOT of the things wrong with this are pretty common ones in BTC land - such as giving a fixed block of shares to the issuer (beyond any for which actual assets existed) regardless of what does/doesn't sell at IPO.  That led to scenario where after 5 million shares had sold, Ken had 40 million with only 5 million beloning to those who put up most of the capital (all bar his few Avalons).  Even when 20 million have sold he'll still have 2/3 of the active shares.  He's not along in this sort of stupidity - nor in the pathetic use of shares to represent reinvestment : is it REALLY that hard if you want to reinvest 20% of profits to only dividend out 80% of profits?

Why is it in AMC's interest to give exclusive rights to VML?

"AMC also guarantees chip exclusivity to VMC, so that AMC won't negotiate a chip supply contract to any other bitcoin systems manufacturer. AMC gets 70% back from the profits on the sale of bulk chips, while VMC gets 30%."

If VML is going to sell them in bulk then clearly it has no objection in principle to others buying them.  So why do they need a 30% cut from sales?  If AMC is going to pay for the chipos up front then they should take a leaf from VML's book - and take cash for pre-orders from VML.  Somehow I don't think Ken would be quite so keen on preorders going in that direction ..  At a minimum there's no reason for AMC to pay VML upfront for preorders if AMC is fronting all the cost for the chips - the expensive part of NRE.

I wonder how AMC can  pledge exclusivity to VMC for chip orders?

That is clearly not in AMC's best interests, as they should be free to seek the best prices.  That sort of conflict of interest is why the separate company charade is not allowed in the real world.
Also AMC has already broken the deal.  Chips were bought from Avalon.  Unless VMC owns the chips, and AMC merely paid for them.  There is no paperwork showing that loan to VMC that I have seen.  That would reduce AMC's valuation even further.

Until I see contracts that change the terms to gross from net, I am sticking by my analysis. 

+1 - I support the change of terms. This is why we need to flip the table and have things benefit AMC investors as we are risking and funding VMC. Ken can keep his VMC and do what he wants with it. AMC should put up the funds for NRE and use the chips to build AMC machines to hash with. VMC can get funding elsewhere and be it's seperate entity with no affiliation with AMC. AMC bought chips from avalon and AMC should continue buying chips from from other vendors if pricing is cheap or just develop AMC's chip and make hardware.

Think both of you (aito and Entropy) are misreading/misunderstanding the exclusivity clause.

It does NOT stop AMC buying chips from elsewhere.
It DOES stop AMC selling the chips they pay to develop to anyone other than VML.  If AMC are paying the NRE then they should be allowed to sell the chips wherever they want - it's basically none of VML's business.  Tieing yourself to an unproven manufacturer is foolishness - and giving away 30% of chip sales profit is charity.

[auto2nr1]

It's good to see we are making progress after a few days of chaos on that thread. All the people wanted was a response and a step forward towards a resolution by Ken. As soon as Ken started typing away and responding all the posts have been positive.

#1 MERGE AMC/VMC OR FIND A WAY FOR THE HARDWARE/MINING BUSINESS TO COEXIST
#2 CREATE A CAP ON SHARES ISSUED TO PREVENT DILUTING OF SHARES

You're horribly misguided with point 2.

It's actually in the interest of shareholders for Ken to sell more shares.  You need to look carefully at who owns waht shares and what each share is entitled to - then maybe you'll agree.  Work out what share of profit you get now and what share of the company you own.  Then work it out again if more shares are sold (bear in mind those sales generate capital).  The results are NOT what you seem to think.

Yes, i understand now. As long as the value of each share holds upon the release of more shares and it is not diluted that is my main concern. Thanks.

[pikeadz]

Hmmm, so much for that flash crash.  You guys look pretty silly right now as the price climbs higher and higher.

[carnitastaco]

Hmmm, so much for that flash crash.  You guys look pretty silly right now as the price climbs higher and higher.

you do realize right after entropy posted, the share price started falling from .0025 to as low as .0009, and it still has yet to recover to the .0025 people bought it at?

[pikeadz]

Hmmm, so much for that flash crash.  You guys look pretty silly right now as the price climbs higher and higher.

you do realize right after entropy posted, the share price started falling from .0025 to as low as .0009, and it still has yet to recover to the .0025 people bought it at?

Of course.  I'm enjoying the climb up as we speak.  Once it passes .0025 I will be back to smear it in his face even more.  This is just the beginning.

[carnitastaco]

Hmmm, so much for that flash crash.  You guys look pretty silly right now as the price climbs higher and higher.

you do realize right after entropy posted, the share price started falling from .0025 to as low as .0009, and it still has yet to recover to the .0025 people bought it at?

Actually it crashed before he posted.

But I guess we all get to choose the gods we pray to.

Hmmm, so much for that flash crash.  You guys look pretty silly right now as the price climbs higher and higher.

you do realize right after entropy posted, the share price started falling from .0025 to as low as .0009, and it still has yet to recover to the .0025 people bought it at?

Of course.  I'm enjoying the climb up as we speak.  Once it passes .0025 I will be back to smear it in his face even more.  This is just the beginning.

Entropy, am I still not allowed to LOL at these fools?

[CMMPro]

Except for that tiny 1.5m share wall at 0.0025....my guess is it will be tough to find that many suckers.

[carnitastaco]

Hmmm, so much for that flash crash.  You guys look pretty silly right now as the price climbs higher and higher.

you do realize right after entropy posted, the share price started falling from .0025 to as low as .0009, and it still has yet to recover to the .0025 people bought it at?

Actually it crashed before he posted.

But I guess we all get to choose the gods we pray to.

heres the bitfunder chart, with the time the thread started:
https://bitcointalk.org/index.php?topic=245713.msg2615254#msg2615254

and I made one for BTCTCO (thread started at the green circle)

[carnitastaco]

Except for that tiny 1.5m share wall at 0.0025....my guess is it will be tough to find that many suckers.

wall is more like 3 mill, between both sites...whats 7,500 BTC between friends though, amirite?

[pikeadz]

Except for that tiny 1.5m share wall at 0.0025....my guess is it will be tough to find that many suckers.

You forget that there were almost a million "suckers" who bought at that price before the dip.  Once people start seeing it rebound, it will get eaten away pretty quickly.  Especially once people figure out all the fears in this thread were nonsense.  Discuss amongst yourselves though and I will be back on the day it passes .0025 so I can hear you say I was right.

[canth]

I'm still concerned about the valuation. What so far gives us a reason to believe that the combined value of VMC + AMC is worth 100M shares x .0025 or $25M? That seems like a lofty valuation given what we know so far. Am I missing something? Is Ken going to restrict the total number of shares issued?

[lysr]

I'm still concerned about the valuation. What so far gives us a reason to believe that the combined value of VMC + AMC is worth 100M shares x .0025 or $25M? That seems like a lofty valuation given what we know so far. Am I missing something? Is Ken going to restrict the total number of shares issued?

Of course, 6 Avalons + 20000 chips worth $25M

[canth]

I'm still concerned about the valuation. What so far gives us a reason to believe that the combined value of VMC + AMC is worth 100M shares x .0025 or $25M? That seems like a lofty valuation given what we know so far. Am I missing something? Is Ken going to restrict the total number of shares issued?

Of course, 6 Avalons + 20000 chips worth $25M

Heh, which is obviously far from the case. Companies are valued at what their future profits will be. If AMC they can take up even 5% of the total hashrate + sales of hardware then they will be worth $25M. The problem is that this is an enormous IF. For that risk, we should be rewarded with a higher reward - not a break even prospect. For those that bought in at .0005, this seems like a reasonable risk/reward ratio. At .0025? That's just too little reward for the risk.

Unless the total number of shares to be issued is reduced drastically, I feel the price is just way too high.

[Vbs]

I'm still concerned about the valuation. What so far gives us a reason to believe that the combined value of VMC + AMC is worth 100M shares x .0025 or $25M? That seems like a lofty valuation given what we know so far. Am I missing something? Is Ken going to restrict the total number of shares issued?

Yep, probably going into something around ~25M total shares.