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Author Topic: Diablo Mining Company  (Read 87112 times)
Puppet
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September 17, 2012, 04:21:53 PM
 #681

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.

+1
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September 17, 2012, 04:25:32 PM
 #682

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.

+2
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September 17, 2012, 05:11:27 PM
 #683

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.

Yes, do that! Black Friday, GLBSE everyone!!!


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September 17, 2012, 05:16:31 PM
 #684

I am now a shareholder of DMC (I'm happy for nefario to confirm this if anyone doesn't believe me).

I'm not going to get back into long discussions about this.  I am, however, going to assert one right and make one firm request as a sahre-holder.

1.  My contract as a share-holder is between myself and DMC.  Other share-holders (and Diablo) may raise and and vote on whatever motions they like BUT they have no right to amend the terms of MY contract.  There is no provision in the contract for amending it.  The contract spells out how funds are divided and the uses to which they may put - those particulars are inviolate.  If a majority of shareholders in DMC would like to enter into a new (revised) contract with Diablo then you have two options:

a) Have him form a new company into which you invest.
b) Make an offer to myself and other share-holders who disagree such that we will sell our shares to you.

The ONLY way DMC's contract can be changed (and it remain DMC) is if EVERY shareholder agrees to sign the new contract - there is no provision in the contract, in law or in common business practice for one group of people (e.g. share-holders) to be able to vote away the rights (as defined in a contract) of others.

2.  Diablo is being investigated for imcompetence and/or scamming.  I don't know who initiated that investigation (made the complaint) nor do I know the specifics of it.  As a share-holder I request that the investigation be completed and its results made public before any other action occurs.



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September 17, 2012, 05:18:45 PM
 #685

As his representative I want to assure you that this contract amendment was carefully reviewed and discussed with many people and there is a very deep reason for each and every statement it contains.
It may have been discussed with many people, but it is very clear that none of them have any knowledge of business or finance in any kind of serious capacity.

The basic idea is that if the company does not make money, management does not get paid -- that is common knowledge.

Except that you worded the contract in such a way that he is being paid from revenue, and not from earnings. This is an egregious error on the part of everyone who wrote and "carefully reviewed and discussed" the contract.

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.

You honestly believe that all of DMC's business activities can operate with a 80%+ net margin? That is completely outlandish.

What do you mean you would be surprised if they went over 20%? They will always go over 20% as long as DMC is operating.

DMC net income formula as per amended contract
i= r - (.2r) - e

i = operating/net income, ie. earnings
r = revenue/gross income
e = all liabilities/operating costs (excluding Diablo)

If e > 0, then net margin < 80%. You should not be surprised if expenses were over 20%, you should actually be expecting it.

For one thing, anyone who complains that Diablo is getting paid too much money hasn't thought through how much 20% of revenue is. It's not very much. A million dollar data center might make $250k gross a year. What's 20% of that? $50,000.

You are talking gross income though, not operating income.

Consider this:

Scenario 1.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $50,000.
$150,000 is left as operating income. That is a net margin of 60%

So DMC retained $150,000 and Diablo was paid $50,000.

3:1 ratio. Payment to Diablo seems a bit high.
Scenario 2.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $100,000.
$100,000 is left as operating income. That is a net margin of 40%

So DMC retained $100,000 and Diablo was paid $50,000.

2:1 ratio. Payment to Diablo seems quite high.

Scenario 3.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $150,000.
$50,000 is left as operating income. That is a net margin of 20%

So DMC retained $50,000 and Diablo was paid $50,000.

1:1 ratio. Payment to Diablo is extremely high.

Scenario 4.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $200,000.
$0 is left as operating income. That is a net margin of 0%

So DMC retained $0 and Diablo was paid $50,000.

0:1 ratio. Payment to Diablo is infinitely more than what DMC actually makes now.

Scenario 5.

$250,000 gross income.
20% of gross income goes to Daiblo, $50,000.
Then operating expenses are paid. Lets say they are $250,000.
$50,000 is left as operating income.

So DMC lost $50,000 and Diablo was paid $50,000.

-1:1 ratio. Payment to Diablo is extremely high.

Do you see the issue here?

Compare those scenarios to the following:

Imagine Diablo is paid 20% of operating income instead of 20% of gross income.

Scenario 1.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $50,000.
$200,000 is remains.
Diablo is paid 20%, $40,000.
$160,000 remains as operating income for DMC and it's shareholders.

So DMC retained $160,000 and Diablo was paid $40,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 2.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $100,000.
$150,000 is remains.
Diablo is paid 20%, $30,000.
$120,000 remains as operating income for DMC and it's shareholders.

So DMC retained $120,000 and Diablo was paid $30,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 3.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $150,000.
$100,000 is remains.
Diablo is paid 20%, $20,000.
$80,000 remains as operating income for DMC and it's shareholders.

So DMC retained $80,000 and Diablo was paid $20,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 4.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $200,000.
$50,000 is remains.
Diablo is paid 20%, $10,000.
$40,000 remains as operating income for DMC and it's shareholders.

So DMC retained $40,000 and Diablo was paid $10,000.

4:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.

Scenario 5.

$250,000 gross income.
The operating expenses (excluding Diablo) are paid. Lets say they are $250,000.
$0 is remains.
Diablo is paid 20%, $0.
$0 remains as operating income for DMC and it's shareholders.

So DMC retained $0 and Diablo was paid $0.

1:1 ratio. Balanced. Diablo is paid based on how much the company actually earns.


I am not saying 20% is a fair or unfair rate. What I am saying is that paying Diablo a % of gross income instead of a % of operating income is grossly inappropriate.

The argument that paying him 20% of revenue will be "incentive to perform well" is false. Paying him 20% of revenue is an incentive for him to simply bring in more revenue. That may sound good, but revenue means nothing if you do not control margins and are not mindful of them. Paying him 20% of operating income forces him to operate in a capacity that is beneficial for himself, shareholders, and DMC on a whole.

I apologize for this long post, but I wanted to fully illustrate the problem with the 2a clause of the amendment proposal in the most simple and easy to understand manner.
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September 17, 2012, 05:19:28 PM
 #686

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.

Yes, buy back my shares at IPO price so that I can turn around and buy a hell of a lot more for market price!

 Grin

On another, more serious note, Factory illustrates a very good point, Usagi. Ignore the obvious troll(s), but please address his point.

Time is more valuable than money. You can get more money, but you cannot get more time.
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September 17, 2012, 05:34:02 PM
 #687

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.

+2


-10. Seriously, why are there so many sock puppets here?

Really, no one is fooled by 5-10 "new guys" who all know SOOO much about DMC and "care so much" give it a rest guys, it's seriously embarrassing.

I am not a "new guy" nor a sock puppet. Please drop the drama and the emotional stuff.

As a shareholder I tell you that I do not want to sign the contract you are trying to force me into. You cannot change the contract after the deal.

If you offer an acceptable way out I may consider it. If not I just want to wait for the result of both the audit and Nefario's motion.
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September 17, 2012, 05:47:51 PM
 #688

Not sure if you get it or not, but no one's listening.

You seem to be the only one who is not listening.

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Are you a shareholder?

Yes. And I bought my shares at market value, I didnt fraudulently receive them like you did.
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September 17, 2012, 05:57:02 PM
 #689

You honestly believe that all of DMC's business activities can operate with a 80%+ net margin? That is completely outlandish.

What do you mean you would be surprised if they went over 20%? They will always go over 20% as long as DMC is operating.

DMC net income formula as per amended contract
i= r - (.2r) - e

i = operating/net income, ie. earnings
r = revenue/gross income
e = all liabilities/operating costs (excluding Diablo)

If e > 0, then net margin < 80%. You should not be surprised if expenses were over 20%, you should actually be expecting it.

Its actually much much worse than that, because coupon payments from mining bonds are considered revenue. The value of mining bonds will  perpetually diminish, but Diablo would take the 20% of the coupon payments and not be impacted at all by the diminishing value of the underlying asset. 

Its really like putting  $100K in a bank account and withdrawing x% monthly, the withdrawals obviously reducing the value of the whats in the bank, yet Diablo pocketing 20% of those withdrawls every month as "revenue". You can repeat that game over and over and Diablo would end up with 100% of the company assets, even if he took a smaller percentage, all he needs is an investment vehicle that pays fat coupons but extinguishes itself equally fast. Mining bonds are already pretty good for that though.
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September 17, 2012, 06:02:45 PM
 #690

Its actually much much worse than that

There are many other concerns and issues that can be talked about. I was choosing to simply focus on explaining why amendment 2a is an inappropriate addition to the contract in terms of compensation and consideration for all parties involved.
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September 17, 2012, 06:28:38 PM
 #691

*shrug* If you're a shareholder then vote. I have way more shares than you do. And hey, if you want to reverse the trades we can do that,

Then let us. Lets start by reversing my trade of 0.5 BTC per share.

Quote
and I will go back to being the 60% majority shareholder, and then I will raise a motion to do the trade again, and you can go to hell.

You can motion all you want, as Deprived pointed out, it doesnt let you alter the contract, nor does it let you retroactively make contract breaches ok. But thank you for opening the eyes of anyone who still thought you were acting in good faith.The mask just fell off.

BTW, Diablo still has 100K or whatever unsold shares, by your logic, he can do whatever the heck he wants, including raping you after this deal.

Quote
This isn't about the trade bro. And as for fraud, you have trouble understanding what the word means. Fraud means an intent to deceive

Which is precisely whats has been going on here. Look no further than the thread title for a good example.
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September 17, 2012, 06:36:40 PM
 #692

Not sure if you get it or not, but no one's listening.

You seem to be the only one who is not listening.

Quote
Are you a shareholder?

Yes. And I bought my shares at market value, I didnt fraudulently receive them like you did.


*shrug* If you're a shareholder then vote. I have way more shares than you do. And hey, if you want to reverse the trades we can do that, and I will go back to being the 60% majority shareholder, and then I will raise a motion to do the trade again, and you can go to hell. I accepted this trade because it accreted mhash per share. Get it? No? Jesus you're slow.

You can't change the terms of the contract by motion.  Not you can approve any action which would breach the contract. The contract is between Diablo/DMC and each individual shareholder - with the rights/obligations of the contract transferred each time a share changes hands.

Passing motions IS done by voting on motions.  Change of a contract can only be done with the agreement of both parties to the contract.  Motions can't change the contract unless unanimously accepted.

Get it? No? Jesus you're slow.

Here's an explanation you can hopefully understand:

If you have 1000 contracts with someone and I have 1 identical contract with that same party then you can ONLY change your own 1000.  Not my 1.  Shares ARE a contract - their value is determined by the rights/obligations they confer/impose on the parties to that contract.  You can't change the contract of DMC unless you own, control or have the agreement of every single other share-holder.

Whine all you want about it.  Be as dismissive to everyone else as you like.  On this specific point you are totally, 100%, beyond any shadow of a doubt wrong.

If you want a changed contract for DMC you need the agreement of myself, puppet, deeplink etc.  You aren't going about things the right way to get that.
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September 17, 2012, 06:44:31 PM
 #693

Haven't you noticed you are the only troll left?

Actually, since you started posting here, Ive only heard of one single presumed shareholder who seemed to think what you proposed was a good idea, and just a few posts ago, he started having questions too; questions you are not addressing. That you are the only one left thinking this plan has any merit is probably closer to the truth, but maybe you can still convince Nebulus.
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September 17, 2012, 06:47:06 PM
 #694

Banks change contracts all the time.
Here is a situation why changing a contract is actually useful.

Let's say the contract keeps a company obligated working with a certain supplier but the supplier produces defective product. It is in company's interest to get rid of the supplier regardless whether there are shareholders who oppose the move. Now, how its done its another story.

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September 17, 2012, 06:47:31 PM
 #695

Diablo should get 50% of nav per share increases on a month to month basis based upon accounting by smickles.

Looking for safe diversification? YABIF: Good Returns, Low Fees, Low Risk.

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September 17, 2012, 06:48:53 PM
 #696

Banks change contracts all the time.

Indeed - and the means by which this occurs is detailed in the contract in the first place: not the case here.

And you are given a period of notice during which you can withdraw all your assets from them rather than agree to the new terms.
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September 17, 2012, 06:49:43 PM
 #697

Haven't you noticed you are the only troll left?

Heh, far from it. Everybody is still watching you make an ass out of yourself.

Really, the way you are handling this situation has made me reconsider every other asset you are involved with. I was considering investing some money in one of your funds, but now I think that is a bad idea.

CryptoNote needs you! Join the elite merged mining forces right now here in Fantomcoin topic: https://bitcointalk.org/index.php?topic=598823.0
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September 17, 2012, 06:54:02 PM
 #698

For the record,  I am deprived, Factory, Bitcoinbear, puffn, Deeplink, ianbakewell, MoinCoin, EskimoBob, Newar and Red Emerald. Not too mention, Pirate.
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September 17, 2012, 06:56:08 PM
 #699

Banks change contracts all the time.

Indeed - and the means by which this occurs is detailed in the contract in the first place: not the case here.

And you are given a period of notice during which you can withdraw all your assets from them rather than agree to the new terms.

Well, man, one thing man...

You should have brought it up before buying shares because apparently no solution sticks with you.

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September 17, 2012, 07:01:04 PM
 #700

You can't change the terms of the contract by motion.

Thank you for outing yourself as puppet. You DO realize that you are the only person who thinks this?

Here's an explanation you can hopefully understand:

If you have 1000 contracts with someone and I have 1 identical contract with that same party then you can ONLY change your own 1000.  Not my 1.  Shares ARE a contract - their value is determined by the rights/obligations they confer/impose on the parties to that contract.  You can't change the contract of DMC unless you own, control or have the agreement of every single other share-holder.

Nope.

If you want a changed contract for DMC you need the agreement of myself, puppet, deeplink etc.  You aren't going about things the right way to get that.

*shrug* If you want the company liquidated, then voice your concerns to Nefario. How many times do I have to say it? This isn't a court of public opinion. As Diablo-D3's representative I will be speaking to Nefario on this directly.

a) Diablo was reported for breaking his contract.
b) The ASICMINER trades were done with the consent of the 50-60% majority shareholder at the time.
c) The ASICMINER trades were explained to Nefario and ColdHardMetal in IRC at the time and were cleared. They won't be reversed unless there is a successful shareholder motion.
d) We are proposing a change to the contract which solves the ACTUAL COMPLAINTS which caused Nefario to freeze DMC.
e) We will propose the current motion be rescinded, the contract changed, and Diablo-D3 reinstated as CEO.
f) If you have failed to understand A-E, they will be repeated to you until you give up.

Dear Trolls; this is not going to go your way. This is not about the ASICMINER trade and it is not a court of public opinion. Have a nice day... lol

This isn't even as serious as you make it out to be.

Your only line of argument seems to be:

"You're wrong"
"You don't understand"
"You don't get it"

etc etc

Just putting your fingers in your ears and repeating "No" every time someone says anything is NOT proof of anything other than your own ignorance.

I'm getting near the point of requesting you be barred from this thread for trolling - just repeatedly saying "You're wrong" is totally unproductive.

To address your listed points:

a) agreed
b) The agreement of the 60% share-holder is irrelevant.  Either Diablo had the authority to do that trade under his contract or he didn't.  If he had the right to do the trade then no agreement of anyone was necessary.  If the trade breached his contract then no percentage of shareholders less than 100% could agree to vary the contract and make the trade allowable.
c) Not hugely relevant.
d) You can't vary the contract without the unanimous assent of all shareholders - as there is no mechanism within the contract for such a change.  Where contracts DO contain a mechanism for being varied then there is always an associated means by which all parties are given notice and a way to withdraw from the contract without losing any of the value they were entitled to under the original contract.
e) You can vote down the current motion.  You can't change the contract.  Diablo still is CEO - he hasn't been fired, just suspended during investigtion.
f)  You can repeat things as often as you want.  It won't make you any more correct.

Saying "I have lots of contracts so I can change yours as well" is wrong.  Saying it 100 times doesn't make you any less wrong - it just makes you look progressively more stupid.
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