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Author Topic: Apple shares  (Read 1824 times)
MoneyIsDebt
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June 24, 2012, 03:45:42 PM
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I'm just probing for now, to figure out how one might structure such a thing, and if it's a good idea or should be dropped.
I happen to own some shares in AAPL. I want to invest in some bitcoin projects, and was planning to sell off some shares and buy coins on an exchange.
However, it struck me that maybe I should issue an asset on GLBSE, backed by the shares.
So, the shares need to be bought/sold in lots of 100. Which is about $58200 currently. That's out of reach for most people. But if I put them on GLBSE, where f.ex.
100 of the glbse asset corresponds to 1 AAPL share - then smaller investors can invest in Apple without needing much capital.
Anyone who accumulates 100 * 100 of the asset can exchange them with me for either ownership of the AAPL stock, or the dollar equivalent from selling the stock.
It could be an interesting asset to see traded, because you'd be speculating on both the AAPL and the dollar vs bitcoin. When AAPL pays dividends, it would be used to purchase bitcoin, which would then be paid out as glbse dividends.

Any thoughts on this model?

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exahash
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June 24, 2012, 04:01:38 PM
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I'm just probing for now, to figure out how one might structure such a thing, and if it's a good idea or should be dropped.
I happen to own some shares in AAPL. I want to invest in some bitcoin projects, and was planning to sell off some shares and buy coins on an exchange.
However, it struck me that maybe I should issue an asset on GLBSE, backed by the shares.
So, the shares need to be bought/sold in lots of 100. Which is about $58200 currently. That's out of reach for most people. But if I put them on GLBSE, where f.ex.
100 of the glbse asset corresponds to 1 AAPL share - then smaller investors can invest in Apple without needing much capital.
Anyone who accumulates 100 * 100 of the asset can exchange them with me for either ownership of the AAPL stock, or the dollar equivalent from selling the stock.
It could be an interesting asset to see traded, because you'd be speculating on both the AAPL and the dollar vs bitcoin. When AAPL pays dividends, it would be used to purchase bitcoin, which would then be paid out as glbse dividends.

Any thoughts on this model?

Yes, lot's of thoughts, none of them very nice.

First, what brokerage are you with that doesn't allow odd lot trading?  Ever heard of Sharebuilder? 

What you're proposing is akin to a mutual fund.  Those are pretty regulated in the US and you will need an experienced securities lawyer to help you.

That said, hey, go ahead and try it.  Some people on GLBSE might be dumb enough to buy in.
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June 24, 2012, 04:25:02 PM
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I think dividends will be too low for anyone to be interested and people holding bitcoins believe the bitcoin price will go up in the long run. BTW, how much Apple pays per share per week  Grin
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June 24, 2012, 04:46:43 PM
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I believe it can be done but, as exahash already mentioned, the regulations might be a PITA.

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June 24, 2012, 05:00:28 PM
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I think dividends will be too low for anyone to be interested and people holding bitcoins believe the bitcoin price will go up in the long run. BTW, how much Apple pays per share per week  Grin

Currently from what has been announced, Apple will be paying about $10 a year for each $580 dollar share (at current approximate market prices).That's a 1.7% return, yearly.

Not a good dividend.

On a side note, a share of AAPL is only $580. Even small investors aren't going to open accounts with less than that unless they are trying to lose money/don't know what they are doing.
MoneyIsDebt
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June 24, 2012, 05:20:06 PM
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Yes, lot's of thoughts, none of them very nice.

First, what brokerage are you with that doesn't allow odd lot trading?  Ever heard of Sharebuilder? 
I'm not American, and thus can't use Sharebuilder afaik. I'm not really a stock trader - I just put some savings in AAPL when they announced the ipod. At the time I was told I could only do lot trades (maybe because of proxy)

What you're proposing is akin to a mutual fund.  Those are pretty regulated in the US and you will need an experienced securities lawyer to help you.
This would put GLBSE itself under what regulation? Do they comply?
Anyway, I'm European and live in Asia, so I don't necessarily care about US rules. But if it is a problem for the investors, maybe I should drop it.

That said, hey, go ahead and try it.  Some people on GLBSE might be dumb enough to buy in.
Well, I reckoned it'd be one more thing one could buy with bitcoins. Not everyone wants to buy steam codes and diablo items.

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June 24, 2012, 05:48:06 PM
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Sounds kind of ABS / CBOish  ... do we really need that already?

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June 24, 2012, 05:54:08 PM
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Sounds kind of ABS / CBOish  ... do we really need that already?

What is so far fetched about trading stocks, on a stock exchange?

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June 24, 2012, 06:23:28 PM
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Yes, lot's of thoughts, none of them very nice.

First, what brokerage are you with that doesn't allow odd lot trading?  Ever heard of Sharebuilder? 
I'm not American, and thus can't use Sharebuilder afaik. I'm not really a stock trader - I just put some savings in AAPL when they announced the ipod. At the time I was told I could only do lot trades (maybe because of proxy)

Interactive brokers. I am European and have an account with them as well. Easy and low fees per purchase. It's just the inactivity fee of $10 ($2 if you are <26 years) a month that's a pain but if you allow them to lend your shares out to short sellers (with collateral) this rakes in some money which can counter the fee.

Stephen Gornick
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June 24, 2012, 09:02:04 PM
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So, the shares need to be bought/sold in lots of 100.

I'ld find a new broker if that was a restriction placed on me.

MoneyIsDebt
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June 25, 2012, 12:09:58 AM
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Interactive brokers. I am European and have an account with them as well. Easy and low fees per purchase. It's just the inactivity fee of $10 ($2 if you are <26 years) a month that's a pain but if you allow them to lend your shares out to short sellers (with collateral) this rakes in some money which can counter the fee.

Thanks, I'll check it out!

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June 25, 2012, 12:15:25 AM
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First of all, please allow me to say:

FUCK APPLE

that is all. Please continue.

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June 25, 2012, 02:48:13 AM
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Interactive brokers. I am European and have an account with them as well. Easy and low fees per purchase. It's just the inactivity fee of $10 ($2 if you are <26 years) a month that's a pain but if you allow them to lend your shares out to short sellers (with collateral) this rakes in some money which can counter the fee.

+1 for IB, they offer the best margin rates too, but for this guy it's probably way overkill.
MoneyIsDebt
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June 25, 2012, 01:44:59 PM
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Thing is, I really want to get off the stock market and into bitcoin, which was why I suggested this in the first place. And I thought it'd be interesting to see how a stock like AAPL, which obviously has ups-and-downs would trade on glbse, where people can much smaller trades. I'm wondering what it'd look like - obviously GLBSE has a small volume, and traders who follow the stock closely could probably profit from the "lag" and do quick trades. So could ppl who are long AAPL (if they do well, of course). Maybe the lack of / difficulty of short selling is a problem here?

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June 25, 2012, 01:57:36 PM
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I wouldn't try this without a bot to maintain your spread close to the actual price.  If AAPL moves hard and you're slow to respond you will lose out.  If this happens enough times you'll end up with half as many bitcoins as if you had just sold for USD and bought BTC.

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June 25, 2012, 02:51:54 PM
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I wouldn't try this without a bot to maintain your spread close to the actual price.  If AAPL moves hard and you're slow to respond you will lose out.  If this happens enough times you'll end up with half as many bitcoins as if you had just sold for USD and bought BTC.
This +1. You're essentially risking against fluctuations of both BTC/USD and AAPL prices.

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June 25, 2012, 02:55:04 PM
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I wouldn't try this without a bot to maintain your spread close to the actual price.  If AAPL moves hard and you're slow to respond you will lose out.  If this happens enough times you'll end up with half as many bitcoins as if you had just sold for USD and bought BTC.
This +1. You're essentially risking against fluctuations of both BTC/USD and AAPL prices.

Yep, since you're quoting in BTC, if BTC moves hard (even more likely) you'll be in the same boat.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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June 25, 2012, 06:29:39 PM
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Generally I really like the idea, the 100 AAPL shares limit is of course a bit tough (trusting you with ~a good motorcycle worth of BTC is a lot), maybe you can work on that somehow.

Also as mentioned you'll need a fast bot that pulls prices from wherever AAPL is denominated + MtGox and prices your shares accordingly.
Maybe you could offer different stocks (that pay out dividends more regularly than Apple) or bonds/options as well? Also some that don't cost ~100 BTC a piece would be nice...

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MoneyIsDebt
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June 25, 2012, 07:17:55 PM
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Generally I really like the idea, the 100 AAPL shares limit is of course a bit tough (trusting you with ~a good motorcycle worth of BTC is a lot), maybe you can work on that somehow.

Also as mentioned you'll need a fast bot that pulls prices from wherever AAPL is denominated + MtGox and prices your shares accordingly.
Maybe you could offer different stocks (that pay out dividends more regularly than Apple) or bonds/options as well? Also some that don't cost ~100 BTC a piece would be nice...

100 shares is just if you want to trade in the glbse asset for the AAPL shares themselves, or the dollar equivalent from me selling them.
As some here have pointed out, by changing to interactive broker I might be able to handle smaller lots (but there'll be more overhead).
And I wouldn't offer them for 100 btc a piece - I'd like to offer at much lower prices so smaller players can participate. So there would be X glbse shares corresponding to 1 AAPL share. Thus you could get on board for a bitcoin or less.
I don't have any other shares currently, but I know of others who are interested and doing similar offerings with other shares, if we can find a working model here.

As for how to do the pricing - it depends on how much interest there is. I'm thinking offering this in portions, so that when I offer N shares they'd all be bought at the same price, and after that the market would be pricing them (using bots, or simply taking a longer perspective - I've held these shares for a long time and haven't cared about price fluctuations, or the USD vs my native currency. Still it's worked out extremely well so far)

Regarding dividends - of course they're going to be puny compared to what's the trend on GLBSE these days. People never bought AAPL for dividend anyway. I just mentioned them because of course, if I sell the stock on GLBSE, the asset holders are the ones entitled to the dividends.  Also, just because I'm offering them now, I might still trade in them later on - I'd just rather trade in bitcoin than usd.

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June 25, 2012, 09:02:30 PM
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if I sell the stock on GLBSE, the asset holders are the ones entitled to the dividends.

Heh, ... so you'll be getting the 1099 for the dividends (and for the proceeds for when you sell the AAPL shares also)?

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