VTX on havelock crashing!

[enter`name`here]

So as a shareholder in the Canadian exchange I can't help but notice I've lost ~ 75% of my invested bitcoins over the past month with shares now trading for 0.1 BTC.  I was curious if anyone here has any insights about the things affecting this company and its stock.  Logically I would think that the stock price measured in bitcoins should be positively correlated to both the volume in bitcoins traded on the exchange and to the price of bitcoins, yet even though these two things have trended up over the past month the share price has tanked. Any theories as to why?

I do believe that the shares were the target of a pump and dump scheme several months ago, so perhaps that destroyed investor confidence? Another factor could simply be the lack of information about how the company is doing makes it hard to value.

So lets do a quick back of the napkin calculation shall we? volume over the past 7 days has averaged 5133 btc  5133 x 52 = 266916.  The exchange charges 1.5% both ways so 3% per txn. 266916 x 0.03 = 8007.48.  8001.48 x $1000 = $8,007,480 gives us a (very) rough estimate for revenue. at 0.1 btc per share and 10,000 shares outstanding (representing 10% ownership of the company) the market cap for the company is 0.1 x 10,000 x 10 x $1000 = $10,000,000

Now the big mystery is what kind of profit margins is the company enjoying?  Lets throw in 10% for an estimate (for a comparison microsoft is 28% intel is 21% and facebook is 21%)

this gives us earnings of $800,148 which makes the price to earning ration = P/E = 10,000,000/800,148 = 12.49

for a comparison facebook = 97.18 microsoft = 14.02 intel = 12.89 Mcdonalds = 17.53

Basically this stock is trading at multiples as though it were a blue chip company in a mature industry, for gods sake it has a lower P/E then McDonalds!

Given that this should probably be viewed as a small cap growth company I would say that there is alot of room for multiple expansion and I am hoping we are near a bottom!

Full disclosure: I increased my position in this stock by 50% today.

[MonkeyBear68]

I too am invested in VTX. I am also down about 75% of my BTC; I invested in April. I am however up when I look at the value in dollars in April of those shares versus the value in dollars now; up about 300% in dollar terms. The "problem" is that currently every investment in the world is pretty much falling in relation to Bitcoin.

VTX were originally sold as shares pegged to a dollar value of $30.00. I actually bought them somewhat as a hedge against Bitcoin going up. When Bitcoin dropped to a low at the beginning of July recall that the price of VTX went up in BTC terms. Now we are in a situation where both Bitcoin and Virtex are soaring; however in dollar terms Bitcoin is a rocket and Virtex a weather balloon.

Another reason VTX has fallen is because there was no dividend paid in the fourth quarter of this year. The next dividend announcement is the first quarter of 2014. Hopefully there will be a dividend paid then or I am afraid these will become lead balloons (relatively speaking of course in relation to Bitcoin).

I believe the VTX BTC based price will stabilize and then start going up once Bitcoin itself somewhat stabilizes. If the price of Bitcoin actually falls (bite my tongue  ) then the Virtex shares should go up. If a good dividend is announced then that should also push the shares up.

On the customer side, I have used CaVirtEx exclusively since August 2011 to trade BTC and they are excellent and very professional. They should remain the dominant exchange in Canada. Also, I believe we need to support the infrastructure around Bitcoin to help it succeed. I believe CaVirtEx is an excellent company and deserves our support, although you need to consider the growth in terms of a real world company and dollar value.

[Kosmatos]

I bought "tons" of shares at .5 and even .6 and have been watching Virtex closely. Bought some more today at .1.

They seem to be doing well. Everyone I know in Canada goes there. There's no good reason I can think of why someone should dump their stock and make the price go down, other than some desire to get out of Havelock, Bitcoin Securities, or Bitcoin itself.

There WILL be dividends eventually, but some people, I guess, can't hold their load.

If I had to find some negatives, I'd say that they need to invest $ into a better logo (WTF, that should be obvious...), improve their web site's look and feel, and continue making sure they don't get hacked and DDoS, and that their trading engine can keep up with demand.

[_mr_e]

I'm in the same boat. Down a lot of bitcoin on this one. What keeps me going is that I have met all the employees personally at local bitcoin events and it certainly seems like they know what they're doing. They have many expansion ideas and watching their trade revenue rocket up along with the price makes me wonder who is actually stupid enough to be selling their shares at 0.1. My only regret is not waiting until now to buy in:P

But seriously, they really need to take that money and overhaul their website. It's really starting to look quite silly. HavelockInvestments style with their WebSockets powered UI is what I'd love to see.

[glendall]

I don't know about vTX, but this is a similar situation with Asicminer, which I lost a few dozen BTC on over the summer.

The problem with Havelock securities (most of them, maybe all) is that a company's valuation does not go up as fast as Bitcoin itself does. So if your company is worth a million dollars, even if the company is doing well, it is likely the stock price will fall when Bitcoin goes up 300% - 500% or whatever.  As the Bitcoin price goes up, the security is worth less and less of the equivalent same value in terms of bitcoin.

[acorcos]

If any from VirtEx happens across this thread ...... START PAYING DIVIDENDS!!

[bobboooiie]

Here's my personal opinion on VTX.

While mining securities will continue to decrease in value over time (this is necessary), VTX is one of the only securities that will go UP over time.  They receive a % of BTC from each transaction.    That is huge.  If they get 1% of a 1 BTC transaction, that's 0.01 BTC.  While BTC value goes up, network hashrate will continue rising as well, knocking most securities out of viability.  VTX will always be able to turn a profit.

Big supporter of VTX.
I bought in @ 0.15 mind you.

Not really true, it will not act like mining operation exactly but very close if BTC price keeps booming traffic in trades of BTC will go down rapidly, so will the dividends(btc wise) .

[MonkeyBear68]

Here's my personal opinion on VTX.

While mining securities will continue to decrease in value over time (this is necessary), VTX is one of the only securities that will go UP over time.  They receive a % of BTC from each transaction.    That is huge.  If they get 1% of a 1 BTC transaction, that's 0.01 BTC.  While BTC value goes up, network hashrate will continue rising as well, knocking most securities out of viability.  VTX will always be able to turn a profit.

Big supporter of VTX.
I bought in @ 0.15 mind you.

I agree with your assessment. Also as Acorcos points out, a dividend in the first quarter of 2014 will definitely show investors this stock is worth purchasing. I also think that BTC related Financial Services stocks (CFIG, NEOBEE) will increase in value as easy ways of transferring between Fiat and BTC are needed. Many banks in Canada are shunning companies once they find out they deal in BTC.

Actually bobboooiie has a valid point also. It is the amount of dollars flowing through the exchange that is important. If the value of a BTC goes up as long as the trading volume remains consistent (or goes up) then there will be growth. Actually the volume could even go down as long as the BTC price is going up enough to compensate.

[_mr_e]

Soon they will be releasing shorting & litecoin trading which I think will help. Solid financials and a dividend will also help EOY.
I've also heard that they are looking into expanding into other countries (excluding the US) and I think such an announcement would make for a huge BOOM. This needs to be treated as a long term investment.

[jerboa]

15 employees to run an exchange this size seems to be a bit much. Perhaps each productive employee has their own secretary? Better to make that long term investment when the price is lower, if you believe in trends this looks to be inevitable.