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splatster
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March 27, 2012, 09:48:16 PM
 #21

I see, but this is not how it usually goes. If new shares are issued, the existing holders get the chance to buy new shares with a given ratio according to already held ones. But typically none (including management aka the OFFICERS OF THE FUND) get shares for free.

Say I'd jump in big and buy 306 shares today. Next week you decide to issue 6100 new shares, you then have 1210 shares and I can't do anything about it with my previously 50%+ held shares getting down to 4.5%. Sounds fishy to me...

In that situation, you have put absolutely nothing more on the line when we issue more shares.  In the same case, I am putting 100 BTC on the line every 500 public shares.  We are NOT getting the shares "for free" and neither should you.

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smickles
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March 27, 2012, 09:50:24 PM
 #22

answer #2 is above you too

THE FUND will raise capital by issuing 610 shares of stock. 500 shares will be offered to the public at a price of 1 bitcoin each. 110 shares will be distributed to the officers of THE FUND. The shares withheld for the officers of THE FUND are identical to the shares offered to the public and convey the same rights as to any owner of the shares. THE FUND reserves the right to issue further stock to raise additional capital for THE INVESTMENT. Should THE FUND issue stock in this manner it will maintain the ratio of shares offered to the public and shares withheld for its officers.


Yea I was hoping for a more concrete answer from the operators.  It seems when a lot of companies on GLBSE offer more shares they are not completely sold out.
If we do issue more shares, it will only be if there is sufficient demand to sell all the issued shares and it would be under the same arrangement as the initial shares in order to avoid dilution.

Sorry for being noob here, but I don't get what 'maintain the ratio of shares offered to the public and shares withheld for its officers' means here. Say I hold 10% or 61 shares and THE FUND decides to issue another 610 shares, does this mean the OFFICERS OF THE FUND get their new 110 shares for free to maintain the ratio and I need to buy another 61 of the new shares to stay at 10%  Huh


Yes, the officers of the fund get more shares, but it's not for free. There is more work involved in managing more BTC. Also, you do not need to maintain your % of shares in order to maintain your return on investment.
Also, from Splatster's perspective, in addition to more work, there is more risk because the guarantee increases.

I see, but this is not how it usually goes. If new shares are issued, the existing holders get the chance to buy new shares with a given ratio according to already held ones. But typically none (including management aka the OFFICERS OF THE FUND) get shares for free.

Say I'd jump in big and buy 306 shares today. Next week you decide to issue 6100 new shares, you then have 1210 shares and I can't do anything about it with my previously 50%+ held shares getting down to 4.5%. Sounds fishy to me...
I'm not sure that I understand your concern with having a give percentage of the number of shares. Can you explain that to me a little further?

splatster
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March 27, 2012, 09:54:01 PM
 #23

I see, but this is not how it usually goes. If new shares are issued, the existing holders get the chance to buy new shares with a given ratio according to already held ones. But typically none (including management aka the OFFICERS OF THE FUND) get shares for free.

Say I'd jump in big and buy 306 shares today. Next week you decide to issue 6100 new shares, you then have 1210 shares and I can't do anything about it with my previously 50%+ held shares getting down to 4.5%. Sounds fishy to me...
I'm not sure that I understand your concern with having a give percentage of the number of shares. Can you explain that to me a little further?

This is exactly the point, your percentage doesn't matter whatsoever, as your dividends would stay the same.  When we issue more shares, you aren't investing anything more.  However, we are investing more into the fund when we issue more shares.  We are essentially buying the shares.

In other words, your percentage decreases because the amount you have invested as a percentage decreases.  Our percentage stays the same because our amount invested increases accordingly.

Before issuance:
Your stake: 61 BTC or 10%
Our stake: 100 BTC or ~18%

After issuance of the same amount of shares:
Your stake: 61 BTC or 5%
Our stake: 200 BTC or ~18%

You are essentially saying that, because other people put more money in, you should get more money and more control because you didn't put any more money in.

S² Capital Management | #bitcoin-otc ratings | 1M5j2g4iz4mSwkngrYkqtcmKNGmyDAQzk2
zefir
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March 27, 2012, 10:05:10 PM
 #24

I see, but this is not how it usually goes. If new shares are issued, the existing holders get the chance to buy new shares with a given ratio according to already held ones. But typically none (including management aka the OFFICERS OF THE FUND) get shares for free.

Say I'd jump in big and buy 306 shares today. Next week you decide to issue 6100 new shares, you then have 1210 shares and I can't do anything about it with my previously 50%+ held shares getting down to 4.5%. Sounds fishy to me...
I'm not sure that I understand your concern with having a give percentage of the number of shares. Can you explain that to me a little further?

This is exactly the point, your percentage doesn't matter whatsoever, as your dividends would stay the same.  When we issue more shares, you aren't investing anything more.  However, we are investing more into the fund when we issue more shares.  We are essentially buying the shares.

Sorry, I might be wrong by being stuck to the traditional stock market. There the market capitalization does not correspond to the sum of company assets but also reflects the investors' hope and expectations (Apple has never ever assets worth half a trillion US$, right).

Therefore your claim is true if the FUND exactly matches the market cap. But how about this: assume you're ueber successful with your IPO and people are buying SS shares like crazy => 10BTC/SS. You issue another 610 shares, get 1100 from new investors and put 100 aside as risk fund => your profit 1000BTC Wink

Or you don't expect SS shares to sky-rocket?

smickles
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March 27, 2012, 10:08:47 PM
 #25

I see, but this is not how it usually goes. If new shares are issued, the existing holders get the chance to buy new shares with a given ratio according to already held ones. But typically none (including management aka the OFFICERS OF THE FUND) get shares for free.

Say I'd jump in big and buy 306 shares today. Next week you decide to issue 6100 new shares, you then have 1210 shares and I can't do anything about it with my previously 50%+ held shares getting down to 4.5%. Sounds fishy to me...
I'm not sure that I understand your concern with having a give percentage of the number of shares. Can you explain that to me a little further?

This is exactly the point, your percentage doesn't matter whatsoever, as your dividends would stay the same.  When we issue more shares, you aren't investing anything more.  However, we are investing more into the fund when we issue more shares.  We are essentially buying the shares.

Sorry, I might be wrong by being stuck to the traditional stock market. There the market capitalization does not correspond to the sum of company assets but also reflects the investors' hope and expectations (Apple has never ever assets worth half a trillion US$, right).

Therefore your claim is true if the FUND exactly matches the market cap. But how about this: assume you're ueber successful with your IPO and people are buying SS shares like crazy => 10BTC/SS. You issue another 610 shares, get 1100 from new investors and put 100 aside as risk fund => your profit 1000BTC Wink

Or you don't expect SS shares to sky-rocket?
New shares would be issued at 1btc each, so you math is a little off there.

EDIT: Further discussion has brought us to the conclusion that, in order to avoid devaluing current investor's shares, new shares would be issued at market value.

splatster
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March 27, 2012, 10:08:55 PM
 #26

I see, but this is not how it usually goes. If new shares are issued, the existing holders get the chance to buy new shares with a given ratio according to already held ones. But typically none (including management aka the OFFICERS OF THE FUND) get shares for free.

Say I'd jump in big and buy 306 shares today. Next week you decide to issue 6100 new shares, you then have 1210 shares and I can't do anything about it with my previously 50%+ held shares getting down to 4.5%. Sounds fishy to me...
I'm not sure that I understand your concern with having a give percentage of the number of shares. Can you explain that to me a little further?

This is exactly the point, your percentage doesn't matter whatsoever, as your dividends would stay the same.  When we issue more shares, you aren't investing anything more.  However, we are investing more into the fund when we issue more shares.  We are essentially buying the shares.

Sorry, I might be wrong by being stuck to the traditional stock market. There the market capitalization does not correspond to the sum of company assets but also reflects the investors' hope and expectations (Apple has never ever assets worth half a trillion US$, right).

Therefore your claim is true if the FUND exactly matches the market cap. But how about this: assume you're ueber successful with your IPO and people are buying SS shares like crazy => 10BTC/SS. You issue another 610 shares, get 1100 from new investors and put 100 aside as risk fund => your profit 1000BTC Wink

Or you don't expect SS shares to sky-rocket?

All of our IPOs will be at 1 BTC each.  We will never change this so as to maintain the ratio.

UPDATE: After some intense talking in IRC, we have decided that all future IPOs will be done at the going market rate.

S² Capital Management | #bitcoin-otc ratings | 1M5j2g4iz4mSwkngrYkqtcmKNGmyDAQzk2
smickles
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March 27, 2012, 10:11:32 PM
 #27

Or you don't expect SS shares to sky-rocket?
I do expect SS share value to do well, and I expect to be justly compensated for contributing to that success.

zefir
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March 27, 2012, 10:28:07 PM
 #28

[...]
Therefore your claim is true if the FUND exactly matches the market cap. But how about this: assume you're ueber successful with your IPO and people are buying SS shares like crazy => 10BTC/SS. You issue another 610 shares, get 1100 from new investors and put 100 aside as risk fund => your profit 1000BTC Wink

Or you don't expect SS shares to sky-rocket?

All of our IPOs will be at 1 BTC each.  We will never change this so as to maintain the ratio.

Thanks, need to go back and read more how primary vs. secondary shares are handled in the 'real' world. Will need to hurry to come back, only 295 shares left...

smickles
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March 27, 2012, 10:31:26 PM
 #29

[...]
Therefore your claim is true if the FUND exactly matches the market cap. But how about this: assume you're ueber successful with your IPO and people are buying SS shares like crazy => 10BTC/SS. You issue another 610 shares, get 1100 from new investors and put 100 aside as risk fund => your profit 1000BTC Wink

Or you don't expect SS shares to sky-rocket?

All of our IPOs will be at 1 BTC each.  We will never change this so as to maintain the ratio.

Thanks, need to go back and read more how primary vs. secondary shares are handled in the 'real' world. Will need to hurry to come back, only 295 shares left...
If the secondary market values the shares at more than 1 btc, then clearly the free market has decided that the entity created by the terms of those shares (which clearly included the distribution which you seem to be criticizing) is worth more than 1 btc. I don't see a problem here.

EDIT: Further discussion has brought us to the conclusion that, in order to avoid devaluing current investor's shares, new shares would be issued at market value.

zefir
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March 27, 2012, 10:38:52 PM
 #30

[...]
Thanks, need to go back and read more how primary vs. secondary shares are handled in the 'real' world. Will need to hurry to come back, only 295 shares left...
If the secondary market values the shares at more than 1 btc, then clearly the free market has decided that the entity created by the terms of those shares (which clearly included the distribution which you seem to be criticizing) is worth more than 1 btc. I don't see a problem here.
Yes, I meant I need go back studying, you for sure are right. Sorry for confusion.

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March 27, 2012, 11:11:51 PM
 #31

We've made a couple of edits regarding the price at issuance of new shares. I've included the sentence "Further discussion has brought us to the conclusion that, in order to avoid devaluing current investor's shares, new shares would be issued at market value." on each of these in my posts.

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March 28, 2012, 01:37:48 PM
 #32

Won't granting yourself 18+% of any new share issued devalue the stock?

This doesn't really sit well with me because you are essentially incentivized by issuing new stock instead of being incentivized by making a profit for investors. I'm fine with the initial 18% going to the fund officers, but I think they should just keep some of the profits as re-occurring "payment" instead of issuing new shares for an 18% payday. Also, simply leveraging 100BTC doesn't mean you're actually giving 100BTC to the fund, it just means it's available. And, the dilution of percentage IS important for voting purposes. Are the officers allowed to sell their initial shares? Are they allowed to vote?

I would simply suggest that any expansion be put to in a motion and that motion should include payment specifics for the officers. I also think that the officers should abstain from voting.

Don't get caught up in the game and have a nice day!
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March 28, 2012, 01:39:02 PM
 #33



nice one^^
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March 28, 2012, 02:23:04 PM
 #34

I wish to participate. The wall of text hurts my eyes. Where do I send my money Smiley


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zefir
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March 28, 2012, 03:30:42 PM
 #35

Won't granting yourself 18+% of any new share issued devalue the stock?

This doesn't really sit well with me because you are essentially incentivized by issuing new stock instead of being incentivized by making a profit for investors. I'm fine with the initial 18% going to the fund officers, but I think they should just keep some of the profits as re-occurring "payment" instead of issuing new shares for an 18% payday. Also, simply leveraging 100BTC doesn't mean you're actually giving 100BTC to the fund, it just means it's available. And, the dilution of percentage IS important for voting purposes. Are the officers allowed to sell their initial shares? Are they allowed to vote?

I would simply suggest that any expansion be put to in a motion and that motion should include payment specifics for the officers. I also think that the officers should abstain from voting.

Thank you for putting my concerns in this easy to understand sentences. Still not clear if 10/61 from new shares go directly to THE RESERVE or not, however 1/61 always go directly to the officers...

Anyhow, its useless now, ask prices doubled to 2BTC meanwhile.

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March 28, 2012, 03:45:31 PM
 #36

Won't granting yourself 18+% of any new share issued devalue the stock?

This doesn't really sit well with me because you are essentially incentivized by issuing new stock instead of being incentivized by making a profit for investors. I'm fine with the initial 18% going to the fund officers, but I think they should just keep some of the profits as re-occurring "payment" instead of issuing new shares for an 18% payday. Also, simply leveraging 100BTC doesn't mean you're actually giving 100BTC to the fund, it just means it's available. And, the dilution of percentage IS important for voting purposes. Are the officers allowed to sell their initial shares? Are they allowed to vote?

I would simply suggest that any expansion be put to in a motion and that motion should include payment specifics for the officers. I also think that the officers should abstain from voting.
"Are the officers allowed to sell their initial shares?" Currently, yes.
"Are they allowed to vote?" Yes. We took care to point out both those points in the terms.
Quote
The shares withheld for the officers of THE FUND are identical to the shares offered to the public and convey the same rights as to any owner of the shares.
As for issuing the officers the stated amount of stock, we saw constructing the fund in this was as providing incentive for the officers to make a profit and build in more incentive by having a financial stake in the fund.

We are of course open to discussion of such an expansion which you suggest here, however, I would like to point out that, as per the current terms, such a motion (and the voting on such a motion) is outside the current rights of the shareholders.

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March 28, 2012, 03:47:13 PM
 #37

I wish to participate. The wall of text hurts my eyes. Where do I send my money Smiley
All of the IPO shares have already been sold, however you can purchase shares on the secondary market by creating an account at glbse.com and sending btc to your account there.

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March 28, 2012, 03:49:15 PM
 #38

Won't granting yourself 18+% of any new share issued devalue the stock?

This doesn't really sit well with me because you are essentially incentivized by issuing new stock instead of being incentivized by making a profit for investors. I'm fine with the initial 18% going to the fund officers, but I think they should just keep some of the profits as re-occurring "payment" instead of issuing new shares for an 18% payday. Also, simply leveraging 100BTC doesn't mean you're actually giving 100BTC to the fund, it just means it's available. And, the dilution of percentage IS important for voting purposes. Are the officers allowed to sell their initial shares? Are they allowed to vote?

I would simply suggest that any expansion be put to in a motion and that motion should include payment specifics for the officers. I also think that the officers should abstain from voting.

Thank you for putting my concerns in this easy to understand sentences. Still not clear if 10/61 from new shares go directly to THE RESERVE or not, however 1/61 always go directly to the officers...

Anyhow, its useless now, ask prices doubled to 2BTC meanwhile.
New shares do not go to THE RESERVE. THE RESERVE is funded by Splatster's personal BTC.

guruvan
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April 02, 2012, 04:39:22 AM
 #39

I wish to participate. The wall of text hurts my eyes. Where do I send my money Smiley
All of the IPO shares have already been sold, however you can purchase shares on the secondary market by creating an account at glbse.com and sending btc to your account there.

I should have payed closer attention yesterday and now I've missed out.

Lot's of excitement on this one, but still - shares are available - a little expensive for me today (with no historical fundamentals yet) so I'll wait, see if the IPO excitement dies down - If not, I don't mind buying in high and selling higher Wink

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April 06, 2012, 02:05:05 PM
 #40

I just verified some of the details (photo ID, home address, facebook) on GLBSE. The rest (excluding a linkedin profile) will be verified in a couple of days.

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