[ActiveMining] The Official Active Mining Discussion Thread

[superduh]

it's ok guys. the bitcoin world is new to the population lacking common sense

[FloatesMcgoates]

Sales of hardware are clearly mentioned in the contract, and thus will be paid out in dividends. It does not matter what you or anyone else thinks about how the money should be spent when the contract specifies what will be done.

My question was not a matter of if dividends will be paid, but when - This week or next week.

There has been no sale of hardware only a pre-order. You cant "spend" a clients money without delivering some goods, unless it is in the creation of said goods.

What are you talking about? Have you just made this point up on the spot?

[hf]

Sales of hardware are clearly mentioned in the contract, and thus will be paid out in dividends. It does not matter what you or anyone else thinks about how the money should be spent when the contract specifies what will be done.

You're absolutely right :
- Sales of hardware are clearly mentioned
- What anyone thinks does not matter, what the contract specifies must be enforced.

Strictly speaking, pre-orders are not sales*. According to the contract, pre-orders money should NOT be paid out in dividends, no matter what you or anyone else thinks.

*Here, you don't have to buy a pre-order, you place a pre-order. It's different from an option, by example. If Ken was selling buy options on AM's future hardware, the money earned by selling the option would go into dividends.
Pre-order are not sales, they are from the buyer POV similar to a buy promise, from the seller POV similar to a sale guarantee.

[gski]

Sales of hardware are clearly mentioned in the contract, and thus will be paid out in dividends. It does not matter what you or anyone else thinks about how the money should be spent when the contract specifies what will be done.

My question was not a matter of if dividends will be paid, but when - This week or next week.

There has been no sale of hardware only a pre-order. You cant "spend" a clients money without delivering some goods, unless it is in the creation of said goods.

What are you talking about? Have you just made this point up on the spot?

I guess the second sentence was made up on the spot and has no foundation outside of my ethical view on how business should be conducted. However I believe my first point is still quite valid.

[Vbs]

Pre-orders are a really tricky subject, as there has to be always some funds reserved for returns. Remember that pre-orders will only have a real cost when the respective hardware is manufactured, so the profit margins are not yet set in stone.

Since ActM does have a mining operation there's some leeway, but caution is very mandatory here.

[Streets 2.0]

Pre-orders are a really tricky subject, as there has to be always some funds reserved for returns. Remember that pre-orders will only have a real cost when the respective hardware is manufactured, so the profit margins are not yet set in stone.

Since ActM does have a mining operation there's some leeway, but caution is very mandatory here.

The more that I think about it, this is a tricky situation.  I understand both sides of the argument, because if the customer requests a refund and the funds have already been distributed then we are all shits up creek on that one.  Considering the fact that it is a pre order, maybe those perceived profits from the miner ordered should not be paid out to any share until the hardware is realized and ready to be shipped.  Only then to the profits get distributed.  Seems logical

[enigmazr]

I like to think of pre-orders as funds that are sitting in escrow.  The sale is final, more or less, but the funds can't be appropriated until the products are delivered.  In this way, pre-orders represent guaranteed future profit.  Once this profit is realized, it can be disbursed to investors in the form of dividends.

[VolanicEruptor]

We definately need Ken to swiftly respond to this question.
Ken?

[kosmokramer]

In this way, pre-orders represent guaranteed future profit.

Guaranteed? Do we know what the refund/cancellation policy is? $100k in preorders looks pretty good until a customer panics and wants to cancel (just ask Terrahash or BFL, both of whom now prohibit refunds).

I'd also like to point out, had BFL considered their earliest pre-orders "guaranteed profit", they would most certainly be disappointed now. Singles that were purchased for $1-2k early on are now being priced at $2,500. This leads me to believe, after going into production, they learned that this hardware was not profitable enough at original pricing. I don't claim to know what any of the hardware costs them, but they're going to be giving out a lot more of it to early orders in order to keep their hashrate promise.

TL:DR - don't count your chickens before they hatch.

[Streets 2.0]

We definately need Ken to swiftly respond to this question.
Ken?

I see both sides, but to play devils advocate, Ken did not have to reveal a pre-order at this time because nothing has shipped and he technically has not sold any hardware.  In all actuality, he has sold a promise to someone, which as some may see it, does fall under all profits, but in this sense I can see where it doesn't fall under either, it is simply a tender, or an IOU to be made later.  From the investors side, profits = dividends, and dividends are our income.  I could be off, but you could play this one from either side of the fence, it depends upon what your end game is.  Im here for the long hall, realizing these gains in September is no big deal to me, provided they are gains realized  

[kslaughter]

We definately need Ken to swiftly respond to this question.
Ken?

We will be using the following:

https://en.wikipedia.org/wiki/US_generally_accepted_accounting_principles

And This:

https://en.wikipedia.org/wiki/Accrual_basis_accounting

And This:

https://en.wikipedia.org/wiki/Revenue_recognition

[VolanicEruptor]

Ken, I think we would like a direct answer on this.  That link is an insult to those who raised the question.

[VolanicEruptor]

I can imagine how pissed you would be if you asked Obama a specific question about how he's going to handle something, and he slams a book down in front of you that says "GENERAL PRINCIPLES OF HOW TO RUN THE COUNTRY" and says "Here, read this!"

That's a spit in the face, Ken.  I'm out..

[kslaughter]

Ken, I think we would like a direct answer on this.  That link is an insult to those who raised the question.

Sorry, I did not mean to insult anyone.  We have manufacturing accounting software and will use the
Generally accepted accounting principles to determine when the revenue is earned.  When that happens
it will reflect on the bottom line as profit or loss.  Then at that time we will pay a dividend if there is
a profit.

[matuszed]

We definately need Ken to swiftly respond to this question.
Ken?

We will be using the following:

https://en.wikipedia.org/wiki/US_generally_accepted_accounting_principles

And This:

https://en.wikipedia.org/wiki/Accrual_basis_accounting

And This:

https://en.wikipedia.org/wiki/Revenue_recognition

+1

This is a hundred percent how this should be done.

[Streets 2.0]

We definately need Ken to swiftly respond to this question.
Ken?

We will be using the following:

https://en.wikipedia.org/wiki/US_generally_accepted_accounting_principles

And This:

https://en.wikipedia.org/wiki/Accrual_basis_accounting

And This:

https://en.wikipedia.org/wiki/Revenue_recognition

+1

This is a hundred percent how this should be done.

Ahh he edited it some and added two links.  Really though, dropping GAAP into the equation, and saying simply to just follow these, I can see why volcanic went kaboom, and emotional.  It is typical for a business to use GAAP, but as Ken said before this is virtual, his words not mine, and to follow guidelines such as this, it may be expected to follow them to the 'T' in all facets if you are just going to plop down links in your post.

This is why I think Ken needs some help to elegantly respond to shareholders, critics, and future investors.  Copy paste of a link without real thought and not explaining the position in the first place will push a lot of folks away

[FloatesMcgoates]

Clearly ken's response means that he does not plan to pay out dividends. Oh well time to see what effect this has on the stock price.


The main problem is that there will be little to no accountability on whatever happens to these pre-order sales figures.

[canth]

Heh. You all realize that this is not a "public" company with all of the regulations and audits that would accompany such a status. Whatever reports that Ken chooses to share with us will be whatever reports he chooses to share. Either you have a reasonable level of trust that this will happen and that the reports will be accurate or you don't. Many companies issue GAAP reports and Pro Forma reports and investors use the combination to make determinations. It's reasonable that Ken can use both options.
 
For comparison's sake, ASICMiner has not yet issued any actual reports on hardware sales or operational costs, yet the level of emotional and shrill comments are far lower. Sure, we all have the right to ask for what we feel is reasonable, but please, let's keep the emotional explosions to a minimum. It just makes those of us looking for facts and solid information reach for the ignore button.

[kslaughter]

Clearly ken's response means that he does not plan to pay out dividends. Oh well time to see what effect this has on the stock price.


The main problem is that there will be little to no accountability on whatever happens to these pre-order sales figures.

I plan on paying dividends and a lot of them.  I want to make all the Investors in AM very successful, because if the Investors are successful I will be successful.

[FloatesMcgoates]

Clearly ken's response means that he does not plan to pay out dividends. Oh well time to see what effect this has on the stock price.


The main problem is that there will be little to no accountability on whatever happens to these pre-order sales figures.

I plan on pay dividends and a lot of them.  I want to make all the Investors in AM very successful, because if the Investors are successful I will be successful.

Sorry my statement was unclear. Obviously you intend to pay out dividends.

What I meant to say was that you are not going to be factoring the pre-sale revenue into the dividend payout.