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Sukrim
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April 15, 2012, 09:56:05 AM
 #41

As to your concern for the people who might be on vacation during an early buy back event, if we are unwinding the bond offerings we will be leaving the buy orders on the accounts for a very long time in order to give the bond holders plenty of time to sell their bonds.  In this scenario we would also be working with GLBSE to locate and refund all the bond holders directly in to their accounts.   
I just dont get,why not to pay all cost of order as a dividend, so you would have no more obligations on this,and then buy it back at very small rate?
For liquidation a final dividend might be the way to go, for normal operations not, as it then is better to just keep the shares and get the next 1.28 6 weeks later.

On the other hand you might make more profit by allowing asset owners to keep their shares and paying 0.28 as dividend every 6 weeks... as you earn an extra 0.14 per share in the meantime by holding onto the money.

This means you could change it to:
1) Offer 2000 shares @1.00 BTC each
2) 28 days later: Pay out a dividend @0.28 BTC each and put up a buy offer @ 1.00 BTC each
3) 1 week later: Cancel buy offer
4) 1 week later: Offer all bought back shares @1.00 BTC each (selling to the highest bidders at the time), continue at 2)

Whoever is lazy enough to just stick with it and leave the money in, gives you an additional 1-2 weeks of keeping the BTC they invested for free (1 week if you consider they could withdraw + buy shares in PPT.x+1, 2 weeks if they don't even reinvest their dividends). Also IPO bidding might get higher (though people could also be tempted to sell instead of you as a down forcing factor...) with this, at a theoretical cap @1.14 (above this it would make more sense to hold onto shares for the additional 2 weeks and sell them instead of you as the operators).

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April 15, 2012, 11:12:55 AM
 #42

With normal bonds the coupon (interest) is transferred to the bond holder every time a payment is due. On the date of the final coupon, the principal is returned as well.

With these bonds there is only one coupon date so it would make most sense to issue a dividend of 1.28 on the final day, rendering the remaining bond valueless (no interest payments nor principal left --> 0 value). After that you would just give out new bonds with another code and start the process anew.

This would also create an incentive for GLBSE to create a way to cleanup these zero value left over bonds to stop their system becoming a mess Smiley

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April 15, 2012, 11:27:41 AM
 #43

Some people have bid to buy shares of PPT at very low prices.  This just ties up funds they could be using to bid on other things - like PPT.A Smiley

I had a bit of a WTF moment when I saw the ticker for PPT, and mine was the order at 0.001.

It seemed like a good idea at the time to make 100,000% i didn't want to be too greedy and go for a milllion, or have more than 1 share...

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Sukrim
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April 15, 2012, 03:00:32 PM
 #44

Another benefit would be that dividends show up clearly in the payout history, giving you more credibility and it might be easier to understand than some weird jumps in share value every few weeks. Also you reward earlier adopters (as they can decide to hold onto their shares). Damn, I should have studied something more closely related to the finance sector... Wink

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Nefario
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April 15, 2012, 07:27:16 PM
 #45

We will be adding functionality to force buyback of shares or assets that have this clause in their contract.

This will not be in the next update to GLBSE (by Friday) but the one following.

PGP key id at pgp.mit.edu 0xA68F4B7C

To get help and support for GLBSE please email support@glbse.com
Raoul Duke
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April 16, 2012, 01:35:29 AM
 #46

Burt, sorry to rain on your parade, but, which is it? Fully insured or insured at 25%?
I see you throw the "fully insured" and after you say "25% insured" and I've seen it a couple times already on this thread... Make up your mind and don't confuse people. Just tell them outright that you'll only cover 25% in case Pirate defaults.

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April 16, 2012, 02:35:25 AM
 #47

How close will this hit. My guess is around 1.1? Making 16% interest?

I'm curious as well.  Perhaps a bet is in order?
http://betsofbitco.in/item?id=337
Seems like it's VERY easy to manipulate that bet though - all you need is to place a buy order at 1.1001 or something and you still will make 18 bitcents from the contract as well as win the bet with 100% certainty.
Depends on what the bet means. Is that the highest price that a bond is sold for, or the lowest? If the bet refers to the lowest price that is still accepted, then it would be much more difficult to manipulate.
I just put a clarification. It is the lowest price a bond is sold for.

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imsaguy
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April 16, 2012, 05:36:55 AM
 #48

You know me. Smiley

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PatrickHarnett
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April 16, 2012, 07:27:10 AM
 #49

Public knowledge that my first deposit was 17 December (four months ago).  My balance with Pirate has been pretty static for the last month or two and accounts for around 1/3 of the coins I have invested.  I also have a couple of thousand in investments like GLBSE, and a diversified loan book covering 18 different people for terms from one week to six months (ranging from 50 to 1500 coins).  So, insuring/backing these bonds is just another part of the portfolio.

So, yes, we have some decent sized accounts of long standing with Pirate.
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April 16, 2012, 12:55:17 PM
 #50

The following chart shows how much monthly interest you will make given different winning bid amounts:

Code:
Your    Your    Eqiv-
Bid     28d     alent
BTC     Rate     APR
----    ----    -----
1.00     28%     364%
1.04     24%     312%
1.08     20%     260%
1.12     16%     208%
1.16     12%     156%
1.20      8%     104%
1.24      4%      52%
1.28      0%       0%

If I pay 1.20 and get 8% interest, I would get 1.20 + 1.20*0.08 = 1.296 BTC... Wink
Percentages can be confusing, I know.

@coinjedi: Thanks for the clarification, good to know I'll make another ~25 Bitcents with betco.in! Grin

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ineededausername
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April 16, 2012, 03:16:44 PM
 #51

Another table!

edit: OgNasty deleted from table at his request.

Code:
I've deleted the table pending better wording, as many people (or I!) misunderstood what exactly
the numbers in it meant. 

(BFL)^2 < 0
Drifter
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April 16, 2012, 08:28:24 PM
 #52

^ Thanks for this

ineededausername
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April 17, 2012, 01:35:30 PM
 #53

If you do not scroll down the insert in ineedausername's post you miss the tl;dr summary:

Quote
As one example [of what the full chart shows] if you think Pirate has a 15% chance of defaulting you are expected to break even on bids under or at 1.12.

If you have a Pirate invite you should:

Code:
  bid under 1.04 if you have >2000 BTC
  bid under 1.12 if you have >500 BTC
  bid under 1.16 if you have >100 BTC

(note that those last three bid limits assume a 15% chance of defaulting, too)

(BFL)^2 < 0
The00Dustin
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April 17, 2012, 02:36:06 PM
 #54

I just noticed that GLBSE says 100% majority required to make any changes.  If you don't change that before you issue shares and someone doesn't send shares back, that might theoretically mean you won't be able to change anything (unless you are able to recall shares by the time it matters).  This may not be a problem since your contract currently says see the forum, so you could issue 2000 whether you sell them all or not and then wouldn't need to issue more later when you want to sell up to 2000, however, it is probably worth considering, and it may be best to have some terms in the contract in case you have to deal with Nefario directly on anything.
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April 17, 2012, 03:41:49 PM
 #55

I can haz PPT.A

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April 17, 2012, 04:10:49 PM
 #56

Quote
And I'm guessing I can't buy them below face value?

Actually, yes you will be able to. There's going to be a synthetic issue (pretty much a vehicle for Mircea Popescu to short this entire operation) offered on MPEx so stay tuned.

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April 17, 2012, 05:30:49 PM
 #57

It does stand for public relations.

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April 17, 2012, 06:07:30 PM
 #58

If you do not scroll down the insert in ineedausername's post you miss the tl;dr summary:

Quote
As one example [of what the full chart shows] if you think Pirate has a 15% chance of defaulting you are expected to break even on bids under or at 1.12.

If you have a Pirate invite you should:

Code:
  bid under 1.04 if you have >2000 BTC
  bid under 1.12 if you have >500 BTC
  bid under 1.16 if you have >100 BTC

What do you think is Pirate's probability of defaulting?

Introducing constraints to the economy only serves to limit what can be economical.
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April 17, 2012, 09:37:30 PM
 #59

Pirate Pass Through (PPT) Bonds

Pirate rates for the small investor!

Each week we will issue up to 2000 bonds.  

These bond auctions will take place every Saturday morning at 2 AM UTC.  That is every Friday evening at 7 PM PDT, 8 PM MDT, 9 PM CDT, 10 PM EDT

These bonds will have a face value of 1.00 BTC when purchased but will be bought back for 1.28 BTC exactly 28 days from purchase on Saturday morning at 12 AM UTC.  That is every Friday evening at 5 PM PDT, 6 PM MDT, 7 PM CDT, 8 PM EDT.
Quote
Doing it this way allows customers who wish to bid on the next auction two hours in which to place their bids and gives everyone two free hours of interest on their money.

The face value of all bonds sold will be deposited directly into a account at Bitcoin Savings and Trust (formerly First Pirate Savings and Trust)

We reserve the right to buy back the bonds at any time during the month for the 1% per day prorated daily rate. In other words if we buy back the bonds 15 days after purchase you will get 1.15 per bond.  Further clarification of this point:
Quote
In the event that BS&T stops payments or changes its terms and conditions so that the intended pass through of interest is either stopped, pays lower interest or at a schedule that does not align with PPT bonds, PPT reserves the right to buy back the currently issued bonds by paying the coupon (currently 1% per day, accrued, simple interest) to current holders.
These bonds are partially insured and backed by a cartel of some of the most reputable and well known BTC lenders in the lending forums:  BurtWagner, PatrickHarnett, dollartrader, hashking, imsaguy and ineededausername.
 
In the case of any default by BS&T you will receive at least 25% of the original face value of the bonds from the capital reserves of PPT.


So PPT is basically stripping the interest from a Bitcoin Savings and Trust (BST) saving account and offering 2000 bonds per week with a face value (the amount paid to the bondholder at maturity) of 1.28 BTC per bond that will be paid 28 days after they are released with 2 conditions.

1.  25% of the "face value" is covered by loss in case of a default and loss of principle from BST.

I have a question about this.  You state that face value is the PPT bonds is 1.00 BTC, but the actual definition of face value for a bond is the amount paid to the bondholder at maturity, thus the actual face value of PPT.A bonds would be 1.28 BTC.  Are you saying that in the event of a BST default and loss of 100% of principle that the bondholders would receive 0.32 BTC per bond (1.28 BTC X 25% = 0.32 BTC) or 0.25 BTC per bond (1.00 BTC X 25% = 0.25 BTC)?

2.  In the event that interest payments from BST is below your expectations then PPT can buyback the bonds at 1% per day on the initial bond listing price of 1.00 BTC per bond.

Does that seem like an accurate understing of the contract?

Introducing constraints to the economy only serves to limit what can be economical.
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April 17, 2012, 10:24:35 PM
 #60


Quote
In the event that BS&T stops payments or changes its terms and conditions so that the intended pass through of interest is either stopped, pays lower interest or at a schedule that does not align with PPT bonds, PPT reserves the right to buy back the currently issued bonds by paying the coupon (currently 1% per day, accrued, simple interest) to current holders.

2.  In the event that interest payments from BST is below your expectations then PPT can buyback the bonds at 1% per day on the initial bond listing price of 1.00 BTC per bond.


The wording was intended to be tighter than simply "below expectations".  It is to cover the event where Pirate stops and winds up the whole thing, or changes the interest rate scheme materially so that we cannot pass through the intended 1%/day rate.  It does not give us the right to issue the bonds on day 1 at a premium and then immediately buy them back. 
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