[Smidge.Com] - A virtual, actively managed, multi-asset digital currency fund

[Smidge]

Update 21:37 CET:

Here is the current IPO status.

Exchange	Ticker Symbol	Shares (free float)	IPO date
btct.co	SMIDGE.COM-A	340,000.00	tbd
bitfunder.com	Smidge.xxx (tbd)	212,500.00	Sun, Aug 11th 1am CET (7pm EST)
havelockinvestments.com	SMIDGE	212,500.00	Wed, Aug 14th 8pm CET (2pm EST)

Some exchanges will start offering the shares later than others, but we are working on syncing the IPO end dates so that free trading begins at the same time (more or less).

What does this mean for current shareholders?
Do we email you to request a transfer of the shares to one of the exchanges above?

Hi mrtchipr,

Yes, you can e-mail or use the contact form on www.smidge.com, identifying yourself with your personal PIN. Then just give us the number of shares and your username on an exchange where we are listed.

This way, you can also transfer shares to other users privately.

[boyohi]

Seems interesting.

[dexX7]

If there's 212.5k shares issued and during IPO only 200k are sold, then the remaining 12.5k shares will be withdrawn (because no owner).

How long does the IPO go?

[Smidge]

If there's 212.5k shares issued and during IPO only 200k are sold, then the remaining 12.5k shares will be withdrawn (because no owner).

How long does the IPO go?

Hi dexX7,

I am currently trying to orchestrate it to end on Saturday, Aug 17th at 2pm EST on all exchanges. It's already set up at Havelock, but I cannot guarantee anything else at this point. Great question btw, I forgot to mention this. Thx.

[Ninshatamoto]

Quick question - have private-share sales already halted, or are they going to halt later on today?

[Smidge]

Quick question - have private-share sales already halted, or are they going to halt later on today?

Hi Ninshatamoto,

Sales of private shares will be halted shortly before IPO, which is this Saturday, 7pm EST (Sunday, 1am CET). Its about 15 hours from now. It means that all orders we receive via the contact form on www.smidge.com until then will still be executed manually.

Edit: corrected the times (it's Saturday EST and Sunday CET).

[freedomno1]

Quick question - have private-share sales already halted, or are they going to halt later on today?

Hi Ninshatamoto,

Sales of private shares will be halted shortly before IPO, which is this Saturday, 7pm EST (Sunday, 1am CET). Its about 15 hours from now. It means that all orders we receive via the contact form on www.smidge.com until then will still be executed manually.

Edit: corrected the times (it's Saturday EST and Sunday CET).

Sorry about that not sure if I made that in time sent to the blockchain awaiting double confirm

[Smidge]

Update 23:28 CET:

The Bitfunder IPO will be postponed to Sunday, Aug 11th during the day because of the setup taking longer than expected. Sorry for that. Private shares are not being offered anymore since today.

Status:

Exchange	Ticker Symbol	Shares (free float)	IPO date
btct.co	SMIDGE.COM-A	340,000.00	tbd (currently 3 of 5 needed votes)
bitfunder.com	Smidge.xxx (tbd)	212,500.00	Sun, Aug 11th
havelockinvestments.com	SMIDGE	212,500.00	Wed, Aug 14th 8pm CET (2pm EST)

[stripykitteh]

The shareholders of the fund “Smidge.Com A” will hold 765,000.00 shares, while Smidge.Com
shareholders will hold 135,000.00 shares. Each of the funds’ shares always equals to 1/900,000 of the
total profits and voting power of the summed value from both the fund and Smidge.Com.

This seems broken, and even though it has already been pointed out twice in this thread, I don't feel that you have addressed it.

If less than 900,000 shares are owned, then what happens to the unowned portion of the fund, given that each share is 1/900,000 of the fund. You responded saying that not all of the 135,000 shares owned by you have been issued, but that demonstrates the problem, it doesn't solve it.

For example, let's say that 100,000 shares are sold to the public and you have issued 100,000 shares to yourself. That means that 1/9 of the profits go to the public shareholders and 1/9 of the profits go to you. Where do the other 7/9 of the profits go to?

A bigger question for me is how you can justify issuing yourself 135,000 shares? You already get 4.5% of the dividends, why do you also get 15% of the assets?

Yes, the audacity is breathtaking.

If this somehow gets off the ground and the principals do not run, I predict there will be some whales fighting each other to do deals with smidge.com.

[Pale Phoenix]

Yes, the audacity is breathtaking.

If this somehow gets off the ground and the principals do not run, I predict there will be some whales fighting each other to do deals with smidge.com.

I haven't paid much attention to this IPO because, while Smidge might be a perfectly nice fellow, there is nothing to suggest he has the skills to manage the amount of funds he seeks to raise.

Now that this is actually going to be floated I've read up a bit. Smidge, two questions for you:

1) Am I to understand that you are issuing yourself 135,000 shares (IPO value: 4050 BTC) for a grand total investment of less than 25 BTC? How can you possibly justify diluting investors to that extent when you also intend to take a management fee?

2) If you have had many years of investing success across different markets, why don't you have personal capital to contribute in excess of $2500?

[narayan]

Hello,

I have gambled half of the fund on Satoshi Dice 50%. We won.

Dividends will be going out later today. We are the best performing fund on the market.

[Smidge]

The shareholders of the fund “Smidge.Com A” will hold 765,000.00 shares, while Smidge.Com
shareholders will hold 135,000.00 shares. Each of the funds’ shares always equals to 1/900,000 of the
total profits and voting power of the summed value from both the fund and Smidge.Com.

This seems broken, and even though it has already been pointed out twice in this thread, I don't feel that you have addressed it.

If less than 900,000 shares are owned, then what happens to the unowned portion of the fund, given that each share is 1/900,000 of the fund. You responded saying that not all of the 135,000 shares owned by you have been issued, but that demonstrates the problem, it doesn't solve it.

For example, let's say that 100,000 shares are sold to the public and you have issued 100,000 shares to yourself. That means that 1/9 of the profits go to the public shareholders and 1/9 of the profits go to you. Where do the other 7/9 of the profits go to?

A bigger question for me is how you can justify issuing yourself 135,000 shares? You already get 4.5% of the dividends, why do you also get 15% of the assets?

Hi odolvlobo,

I think you are misunderstanding the function of the 135,000 shares, at least in part. Maybe I also did not describe it in enough detail, sorry if that is the case.

These shares will be used at first to transfer the Smidge.Com pre-IPO shares on the exchanges. Which means, if you participated in the pre-IPO offering and want your private shares to be transferred to any exchange, the pool of 135,000 shares will be used for that. Smidge.Com will own whatever is left of that.

I have already stated that the rest of the 135,000 Smidge.Com shares would be issued in relation to the free float shares. As a reference, we have sold about 30,000 pre-IPO shares, which means 105,000 Smidge.Com shares are left. Using your example, when 100,000 free float shares are issued, 11,600 Smidge.Com (minus pre-IPO, as explained above) would be issued alongside.

Please take a look at other operations, which sometimes own much larger parts or a majority portion of the shares issued.

Zero share holding means zero responsibility to shareholder's profits.

[Vexual]

So if I invest 2.5BTC, then approximately 15% goes directly into shares held by you Smidge?
But this amount can change depending on how many "PRE-IPO" shares you sell?
It is still unclear to me.
Furthermore, is a "PRE-IPO" not really an IPO?

[Vexual]

From smidge.com business plan:
"
Details of the “Smidge.Com A” private offering:
-
Number of shares available: 315,000.00
-
Pre-IPO share price: 0.02 BTC
"
Is 315,000 written here in error?

[Deprived]

Please take a look at other operations, which sometimes own much larger parts or a majority portion of the shares issued.

Zero share holding means zero responsibility to shareholder's profits.

Would like to point to another investment fund where the managers take shares for free?  All other investment/trading funds the managers only get shares either:

a) From putting in cash/assets equal to the price of the shares.
b) As payment of their management fee (the fee being paid in shares given at current NAV/U)

You don't need to use 135k shares to represent 30k shares sold pre-IPO - just hold back 30k from sale.

And you haven't at all addressed the disproportionate impact they have if the IPO doesn't sell out.  If you only sell, say, 10k shares at IPO you end up owning majority of equity whilst having put in a tiny part of the actual value.

Shares represent equity - they aren't something that should be used to fudge things like management fees.

[ronaldlee0917]

Most (meaning 80%+) of traditional investment funds do not beat their compared index (US funds compared to the DOW, etc.). There is a quite a few studies about this. The reason is poor stock picking and horrendous fees (a normal managed fund takes 5% Issue surcharge, 2% admin fee + earnings based fees). That means, you are paying for the fund manager's Ferrari most of the time.

Smidge.Com takes a mgmt fee of 4.5% on dividends only, that's it. The substance of the fund will not be touched. The "magic", meaning our competitive advantage, has been detailed in the Strategy section of the business plan. It describes our capabilities and some of the detailed actions.

What about this?
You were talking about horrendous fees, but now you are given 105,000 shares for free, your cut from those shares + 4.5% managment fees add up to nearly 20%...

[stripykitteh]

Please take a look at other operations, which sometimes own much larger parts or a majority portion of the shares issued.

Zero share holding means zero responsibility to shareholder's profits.

Which is why you should be tipping in your own cash to buy your own shares, rather than hoovering it out of the pockets of your investors. If you get an easy payday from the IPO what incentive do you have to deliver a return to your shareholders?

[Smidge]

Smidge.Com Weekly Snapshot

Quick Summary:

Like last week, the market was in constant downward motion. Although we managed to finish slightly stronger than the DCX index, NAV is down by 8.61%. Fund size is up by another 162.48%. We are still building up assets from our large growth of the last weeks and again managed to get some interesting purchase prices during the week. This should unfold and help increase our NAV as we move forward and the market recovers.

The IPO planned for Saturday, Aug 10th 7pm EST has been postponed to today. I will postpone it further until all open questions, especially regarding share structure and other details, are answered. I think this is the most sane way to approach this to create as much transparency as possible for our current and future shareholders. As stated earlier, nothing will be rushed and I am willing to take each and every precautionary measure in order to build trust and confidence.

Balance Sheet:
https://docs.google.com/spreadsheet/ccc?key=0AgLGW6ARhmFLdDVyLUFPYjBHX0FIWWxXTy1Bc09uaVE&usp=sharing (Please note that the format is not final still, still tweaking a few things here and there. Columns "E" and "I" are hidden for a clearer view.)

Comments:

• ASICMINER is down 8,68% over the week, despite an announcement of new ASIC hardware that will be up for sale
• LabCoin has fallen under IPO price, having received numerous inquiries from investors and general interest deminishing
• Ciphermine's share price is also down 8.7% in BTC because LTC/BTC is currently not helping at all. LTC/BTC itself is approaching more attactive buying levels
• Management fee from this week has been fully reinvested, just like last week
• Please note that dividends per share are still quite low and will be reinvested before IPO, this is due to the reason that we did not invest all of the additional coins. As discussed previously, we will not invest in just anything because excess coins are available
• Received 0.2 BTC in tips

I announced last week that I will be making performance comparisions with the first data sets generated by DCX at http://dcx.smidge.com

Although we beat the index slightly (it's down 9.83% over the week), it is still not a reliable indication of "The Market". I have been getting a lot of input on this, but haven't been able to work on it much this week. There is quite a few people coming on board in this project, which I highly encouraged from the start because I don't want to keep trying to beat an index that I created myself. It was meant to to be a community project and everyone should agree with its function (composition, weight, formula...).

DCX is an attempt at creating a reference index, more at https://bitcointalk.org/index.php?topic=267351

Again, I would like to thank everyone for the great support, criticism and questions that we received. As an investor, I know very well that new assets are not easily trusted. I hope to be able to meet everyone's expectations in the long run!

Edit: Grammar and spelling.

[Vexual]

Exactly how many free shares are you issuing to yourself Smidge?

[Vexual]

-   Number of shares available: 315,000.00

I think you are misunderstanding the function of the 135,000 shares, at least in part. Maybe I also did not describe it in enough detail, sorry if that is the case.

These shares will be used at first to transfer the Smidge.Com pre-IPO shares on the exchanges. Which means, if you participated in the pre-IPO offering and want your private shares to be transferred to any exchange, the pool of 135,000 shares will be used for that. Smidge.Com will own whatever is left of that.

So what is it 315,000 or 135,000?