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Author Topic: Diablo Mining Company  (Read 87093 times)
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September 16, 2012, 09:00:21 PM
 #661

Do you know how much time and effort he is putting into this? A lot.

Far too much. Had he done diddly squat, his investors would have been ~20x better off. And they still would be better off now if the company was simply liquidated, rather than letting Diablo pocket 20% and ruin what little is left of the rest.

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When this gets big

How on earth do you expect this to become big? No sane investor is going to pump new money in to this and In 3 months you wont be arguing over 2000BTC anymore, but 500.

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The simple fact is, this is a major undertaking,

Dreaming is such a hard job..
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and the 20% rate is quite fair. Again, considering real-world companies that only pay out 3 or 4% a year, DMC paying out 40% of it's profit each month is a really good deal.

You are an idiot. There is no profit, there is only massive losses. And no company pays its CEO 20% of its REVENUE. Particularly not when 99% that "revenue" is insufficient compensation for the eroding value of the company assets. Its like putting $10K in a fund and drawing $1K from it each month and calling it "revenue". Its hilarious.

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Why does everyone keep talking about the trade between usagi and diablo? Sorry, but I partook in just 20% of the total shares traded in the ASICMINER deal. I traded 4200 out of 18700.

Yeah and you got them for 50 BTC while early investors would have invested 4200BTC for it. How would you feel if Diablo traded his remaining 100,000 shares for 10 BTC?
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nebulus
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September 17, 2012, 12:16:43 AM
 #662

God, everybody ganged up on poor Diablo... This guy helped me out a lot to get my 4x7670s setup when there was nothing on them on the net. He also runs a DC for living. He's a mod and probably the best coder I've seen. Stop throwing accusations, I don't know how this helps your case.

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September 17, 2012, 12:21:48 AM
 #663

God, everybody ganged up on poor Diablo... This guy helped me out a lot to get my 4x7670s setup when there was nothing on them on the net. He also runs a DC for living. He's a mod and probably the best coder I've seen. Stop throwing accusations, I don't know how this helps your case.
And nobody denies that and it will still stand after this is over, whether he will be reliefed of the accusations, or "found guilty".
Yet this makes it only more sad and harder to understand what happened.
But the facts remain, that he massively destroyed shareholder value.
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September 17, 2012, 12:32:39 AM
 #664

he massively destroyed shareholder value.

As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.

Isn't it in their interest for him to succeed?
How the hell replacing him as CEO is going to solve anything?

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September 17, 2012, 01:09:50 AM
 #665

he massively destroyed shareholder value.

As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.

Isn't it in their interest for him to succeed?
How the hell replacing him as CEO is going to solve anything?
DMC has achieved a 95% capital destruction by letting it not sit.
When there is no good option to buy, you don't have to buy the least worst option (like "it destroys capital only half as fast as my current investment, therefore i buy")
Just buy nothing.
But that requires serenity.

Edit:
Yes he has this visions, but IMHO he has not the capability to turn them into reality, and more severe he doesn't realize that he is not capable.
It could work if he gathers the right people around him.
I think it would even work better, if he would just do the executing part and not the supervising and calculations.
He has proved excellent excecuting skills (programming) with his mining Software, for the rest, well look what has happend to DMC.
He turned it into a financial institution, completely leaving his skills dormant and his weak spots open.
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September 17, 2012, 01:25:28 AM
 #666

it destroys capital only half as fast as my current investment, therefore i buy

I thought ASICMINER was a decent investment considering they are "revving up."

How do you suppose you pay dividends if it just sits?
Buying nothing is stupid. Serenity? I am sorry but serenity is for rocks.

I think he might have misjudged on the dividend part.

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September 17, 2012, 01:30:40 AM
 #667

it destroys capital only half as fast as my current investment, therefore i buy

I thought ASICMINER was a decent investment considering they are "revving up."

How do you suppose you pay dividends if it just sits?
Buying nothing is stupid. Serenity? I am sorry but serenity is for rocks.

I think he might have misjudged on the dividend part.

His contract was very clear on dividends.
Only mining revenue will pay dividends.
So he always had the option to pay no dividends, just buy back shares or do nothing.
And ASICMINER does not pay dividends (yet). And if we are really unlucky, never will.
Yes I know - Greed beats serenity 99 out of 100 times. Hard not to stress BC** here  Wink
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September 17, 2012, 01:40:44 AM
 #668

So what did DMC get for those extra 14 000 shares ?

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September 17, 2012, 01:42:16 AM
 #669

Only mining revenue will pay dividends.

I guess he should get dividends returned.

Stakeholders are the ones who are greedy... Always...

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September 17, 2012, 01:45:42 AM
 #670

Only mining revenue will pay dividends.

I guess he should get dividends returned.

Stakeholders are the ones who are greedy... Always...
Mining is a bet, that USD/BTC and difficulty, if at all, only rise slowly. (if you already hold BTC and convert them into mining-whatever)
If you are greedy, mining will not work anyway.

Do not understand, what you mean by "he should get dividends returned" though.

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September 17, 2012, 01:49:05 AM
 #671

he massively destroyed shareholder value.

As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.

Isn't it in their interest for him to succeed?
How the hell replacing him as CEO is going to solve anything?
DMC has achieved a 95% capital destruction by letting it not sit.
When there is no good option to buy, you don't have to buy the least worst option (like "it destroys capital only half as fast as my current investment, therefore i buy")
Just buy nothing.
But that requires serenity.

Edit:
Yes he has this visions, but IMHO he has not the capability to turn them into reality, and more severe he doesn't realize that he is not capable.
It could work if he gathers the right people around him.
I think it would even work better, if he would just do the executing part and not the supervising and calculations.
He has proved excellent excecuting skills (programming) with his mining Software, for the rest, well look what has happend to DMC.
He turned it into a financial institution, completely leaving his skills dormant and his weak spots open.



The real problem is fixed mh/s mining bonds. They are the worst wealth destroyers Ive ever seen. Youd be better off investing your money in hookers and blow at least you would get something out of getting "screwed"

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September 17, 2012, 01:52:28 AM
 #672

The real problem is fixed mh/s mining bonds. They are the worst wealth destroyers Ive ever seen. Youd be better off investing your money in hookers and blow at least you would get something out of getting "screwed"
Correct with assett backed mining you should get almost 100% of the USD value of your investment back, under any circumstances, even if USD/BTC and difficulty rise sharply.
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September 17, 2012, 02:03:50 AM
 #673

The real problem is fixed mh/s mining bonds. They are the worst wealth destroyers Ive ever seen. Youd be better off investing your money in hookers and blow at least you would get something out of getting "screwed"
Correct with assett backed mining you should get almost 100% of the USD value of your investment back, under any circumstances, even if USD/BTC and difficulty rise sharply.


No you just lose less as you can still sell the gear on the second hand market. With bonds you dont even get this.

I used to be in a mining company so i know what happens when the difficulty outpaces the ability to grow the mining cluster any further and its not pretty.

It goes like this -
Mining company that grows to keep up with or outpace difficulty = good
Mining company that doesnt grow = bad.
Fixed mh/s mining bond= worst.

Thats just been my experience the last 12 months to 2 years there is no trolling involved  Smiley

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September 17, 2012, 07:00:42 AM
 #674


I see you found an excuse to ignore pertinent questions, pretending to be insulted by an ad hominem. However, its merely a statement of fact:
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"6: I'm well aware of how markets work, I'm not going to bid up (or pay too high a price) for the bitcoin miners after the IPO just to get my hands on their shares. If I did that the NAV would fall after the IPO because I'm an idiot of a trader. I wish to avoid that at all costs."
https://bitcointalk.org/index.php?topic=81993.0

You did precisely that and burnt 40% of your investors money (probably closer to 80% if they actually wanted to get out). So you are an idiot, get over it. With that established, lets get back to the topic at hand:


no company pays its CEO 20% of its REVENUE. Particularly not when 99% that "revenue" is insufficient compensation for the eroding value of the company assets. Its like putting $10K in a fund and drawing $1K from it each month and calling it "revenue".


Under your contract, Diablo would be entitled to 20% of those monthly payments. Do it a few times, by putting the coupon payments back in to a fund (or mining bond) and after some time Diablo ends up with virtually 100% of the company's assets. Idiotic is too mild a term to describe this.
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September 17, 2012, 08:10:02 AM
 #675

In a suprising turn of events, Diablo-D3 has agreed to hire me, usagi, as his representative in this issue.

I will speak on behalf of Diablo-D3 and represent him in this issue. My fee is 5 btc. Diablo has expressly authorized me to field all questions on behalf of the GLBSE, investors, and the public on this issue.

We are issuing a statement: Things have gotten blown out of proportion. Everyone wants what is best for DMC and for investors. Therefore we are prepared to make an offer. The DMC contract will be modified as follows:

1. Diablo-D3 will modify his contract to state his business plan:
a) Buying shares of mining issues on GLBSE.
b) Buying hardware (when appropriate) for the datacenter.
c) Buying solar power (possibly before mining hardware) and possibly reselling solar power into the grid should surplus exist.
d) Selling dedicated hosting/web hosting if there is spare datacenter capacity
e) Other sources of income, from time to time, to be passed through shareholder approval via binding motion.


2. Seeing as how if the business he runs can't exist if it can't pay him a reasonable amount, the dividend structure will be changed as follows:
a) Out of all the money DMC recieves as income (excluding sale of shares), Diablo will recieve 20%.
b) The remaining 80% will be used to cover operational expenses.
c) Of the money remaining after operating expenses, half will be paid as dividend each month, and
d) the remainder will be used to expand and grow the company.

3. Diablo-D3 will hire smickles of S2 capital management to do accounting for DMC (effective immediately).


This simple 3-step plan shows that Diablo-D3 is competent enough to manage DMC and is the best person for the job.

I will be speaking with Nefario immediately to vet this and see if we can't turn this situation around.

I propose something along those lines:

a) DMC acting manager will receive monthly bonus of 20% from the net income (excluding sale of shares). Bonus will be paid out only if NAV for the period (previous month) has risen over N%.
(feel free to correct the grammar, I am not a native English speaker)
What is the reasonable N%? 1%?

What I also like to see is a growing reserve fund in BTC. If there is nothing good to invest in, sitting on BTC is better than wasting it on questionable investments.


While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
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September 17, 2012, 08:46:03 AM
 #676

As far as I gather he has made investments that take time to mature rather then let money sit. I think it's rational... I don't know maybe I am missing something. The part where investors are trying to stamp him into ground rather than try to get what is going on with his vision is what kills me.
No. He's made investments in mining bonds which are, for the most part, pretty much guaranteed to lose value over time and may even lose value at a greater rate than they pay out dividends. usagi's proposal involves giving him a fixed 20% of the revenue from everything - including those mining bonds - effectively incentivizing him to invest in bonds that are guaranteed to wipe out shareholder value rather than making investments that will actually grow. (Also, he's diluted the holdings of existing shareholders massively by trading newly-created DMC shares for shares in other GLBSE assets at ratios which severly undervalue the DMC shares.)

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September 17, 2012, 01:01:12 PM
 #677

People who are stating that "no business pays it's employees out of gross" have not thought through how this system will work. The basic idea is that if the company does not make money, management does not get paid -- that is common knowledge.

However, if case of your proposal, if the company does not make money, Diablo does get paid, because he gets 20% of income, regardless of expenses. Profit = income minus expenses. The fair way to do this is pay Diablo X % of profit, not income.

I have thought this through and come to the same conclusion as people who object to the proposal. Your reasoning is flawed or at least very vague.
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September 17, 2012, 02:56:18 PM
 #678

That's an interesting perspective, and I will pass it by Nefario, but we will be sticking with the plan as stated for now -- no matter how you slice it, if a business cannot afford to pay the employees, it cannot afford to operate. Plus if you think it through, expenses are just not going to be 80% of the company. I would be personally surprised if they ever went over 20% for a project like this. The plan itself is brilliant -- solar power (and reselling into the grid) and selling spare capacity in the form of web hosting and dedicated servers.

There will be plenty of time to sell or buy shares if you disagree with this plan. Right now 20% gross will be less than $40 a week after exchange rates and there are no expenses other than trading fees. There will be zero gain or loss to company cashflow because of this until we start to get up into the $100k - $200k range. You will have plenty of time to buy in or sell out by then. Simply put you are welcome to disagree and not invest -- this is not about making DMC appeal to every investor.

This is, and only is, about making DMC a transparent, stable company, and guaranteeing the trust placed in Diablo. That's it.

How exactly does this "guarantee trust placed in Diablo"? Diablo is indeed on trial by shareholders for gross incompetence and mismanagement, and for obliterating shareholder value, and you think giving him 20% of every trade is the solution? I think not.

And I also think you have no say in this, or at least no more than the amount of shares your 50 BTC investment would entitle you to. Diablo breaching his contract and giving you thousands of shares, so you can vote in his favor has fraud written all over it.
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September 17, 2012, 04:12:54 PM
 #679

The "do not invest" excuse might fly, if this contract was drafted before people bought shares. Guess what.. THEY ALREADY DID. And
And now you and DIablo consipire to alter the contract post factum to rob those investors of what little equity they have left.

If you really want to implement the most stupid contract ever, go ahead, but liquidate the company first or buy the existing investors out for a price they agree to. Anything less is breach of contract and fraud, plain and simple.
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September 17, 2012, 04:19:11 PM
 #680

The "do not invest" excuse might fly, if this contract was drafted before people bought shares. Guess what.. THEY ALREADY DID. And
And now you and DIablo consipire to alter the contract post factum to rob those investors of what little equity they have left.

If you really want to implement the most stupid contract ever, go ahead, but liquidate the company first or buy the existing investors out for a price they agree to. Anything less is breach of contract and fraud, plain and simple.

I think it would be reasonable for Usagi and Diablo to offer to buy shares back from anybody who does not approve the contract change at the original IPO price.

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