ASICMINER: Entering the Future of ASIC Mining by Inventing It

[dexX7]

I don't understand this, if they could be mining 1000TH instead of sold them as USBs, that is enough to make them dominate the network. Share price would still be 4-5, and they'd be making enough to dominate the next generation.

As it is, shareholders have received zero benefits from those sales and watched their shares drop by 1000 %

I hope everyone purchased more shares now that they are cheap*, because as the following numbers may break some bear spines..

To put the ASICMINER financial report in some perspective:

According to the income statement last quarter includes:

Income: 104,622.45 BTC (mining: 33,020.91 BTC, hardware sales: 71,601.54 BTC)
Expenses: 20,109.31 BTC
Net income: 84,513.14 BTC

It's not all that clear which time span the report covers, so let's say 13 - 15 weeks to include all possibilities. This results in the following weekly averages:

Income per week: 6,974.83 - 8,047.88 BTC
Expenses per week: 1,340.62 - 1,546.87 BTC
Net income per week: 5,634.21 - 6,501.01 BTC

Mining a block rewards 25 BTC and 6 - 7 blocks are mined hourly, depending on the increase of the hashrate.

So there are 150 - 175 BTC mined each hour, 3,600 - 4,200 BTC each day and 25,200 - 29,400 BTC each week.

Or in total 327,600 - 382,200 BTC are mined in 13 weeks and 378,000 - 441,000 BTC in 15 weeks.

This means:

ASICMINER generated an income which equals 23.72 - 31.94 % of all mined coins in this quarter.

Subtracting the expenses (i.e. electricity and hardware cost) results in a net income of 19.16 - 25.80 % of all mined coins in this time frame.

The balance sheet shows that there are 5,484.66 BTC, 393,202.00 USD and 15,318,262.72 RMB in assets, whereby 5,484.66 BTC and 4,480,310.50 RMB are in form of cash.

With an exchange rate of 6.087 RMB/USD and 198.28 USD/BTC this equals:

ASICMINER owns assets with a BTC value of 20,159.64 BTC (with 9,196,81 BTC in cash)
Or converted to their USD value: 3,997,254.14 USD (with 1,823,544.13 USD in cash)
Or converted to their RMB value: 24,331,285.96 RMB (with 11,099,913.17 RMB in cash)


*I'm not very serious, please draw your own conclusion. This is just a quote which some may recognize.

[stripykitteh]

Maximizing profit, when the share price dropped from 5 to .5? I would say it is the opposite. They may have made more money selling, but now they are sunk, with some vague promises about next year. At least if they were hashing 1000 TH they would still be #1 for several months longer. Image means a lot in business. Then the share price may not have risen and crashed so traumatically. I think a lot of people are pissed right now because of how this was handled.

The share price has nothing to do with whether they maximized profit. AM got way overvalued because it was for a while the only ASIC company with a good reputation that you *could* invest in. The correction was inevitable.

I don't think FC would want to mine 1000TH on the Gen 1 tech, that would take about 7MW of power, which would generate a terrific amount of heat. There isn't a data centre in Shenzen that could handle that load.

AM have stumbled getting a second generation of chip out the door but their share price would have dropped anyway.

A lot of people are pissed right now because they bought in to the hype when the whales were quietly making their way to the exits. They deluded themselves.

[ventolin]

Somebody, please, explain me: how to sell my shares that was automatic transfer to Friedcat?

[KCBitcoin]

Somebody, please, explain me: how to sell my shares that was automatic transfer to Friedcat?

Importing Shares to Havelock Investment
There is no fee to import shares. There is no minimum quantity for importing shares.

How to Import Direct Shares:
1. Send an e-mail to fnnirvana@gmail.com & TAT Investments at tat.investments@gmail.com with the following message:

”Friedcat, please transfer (X) of my shares to the TAT Investments account at 1rHfXj4AwH9zymwwJuXnbXLiDbAE9V1uz -- tat.investments@gmail.com”

Also include the following info:
- Your current ASICMINER share-holding wallet address & e-mail address
- The quantity of shares you wish to transfer

2. If the e-mail address you have on file with ASICMINER is different than the one you use for your Havelock account, you MUST send an e-mail from the e-mail address you have registered with Havelock confirming this import request. If this is the case, please provided a dated, signed message from the host wallet to confirm ownership.
3. After confirmation from Friedcat is received, the AM1 shares will be added to your account within 48 hours or less.

NOTE: TAT Investments is not responsible for delays or errors in transfer confirmations by ASICMINER staff.
Please follow these instructions carefully to avoid problems.

[hlynur]

Somebody, please, explain me: how to sell my shares that was automatic transfer to Friedcat?

Importing Shares to Havelock Investment
There is no fee to import shares. There is no minimum quantity for importing shares.

How to Import Direct Shares:
1. Send an e-mail to fnnirvana@gmail.com & TAT Investments at tat.investments@gmail.com with the following message:

”Friedcat, please transfer (X) of my shares to the TAT Investments account at 1rHfXj4AwH9zymwwJuXnbXLiDbAE9V1uz -- tat.investments@gmail.com”

Also include the following info:
- Your current ASICMINER share-holding wallet address & e-mail address
- The quantity of shares you wish to transfer

2. If the e-mail address you have on file with ASICMINER is different than the one you use for your Havelock account, you MUST send an e-mail from the e-mail address you have registered with Havelock confirming this import request. If this is the case, please provided a dated, signed message from the host wallet to confirm ownership.
3. After confirmation from Friedcat is received, the AM1 shares will be added to your account within 48 hours or less.

NOTE: TAT Investments is not responsible for delays or errors in transfer confirmations by ASICMINER staff.
Please follow these instructions carefully to avoid problems.

thanks for the instructions, i planned on doing that for some time now.
since the bitcointalk downtime recently i suppose havelock is probably a better place for AM shares than solely relying on forum auction system.

[irritant]

this must be some kind of error right?

http://asicminercharts.com/

[supert]

According to the income statement last quartal includes:

Income: 104,622.45 BTC (mining: 33,020.91 BTC, hardware sales: 71,601.54 BTC)
Expenses: 20,109.31 BTC
Net income: 84,513.14 BTC

It's not all that clear which time span the report covers, so let's say 13 - 15 weeks to include all possibilities. This results in the following weekly averages:

Income per week: 6,974.83 - 8,047.88 BTC
Expenses per week: 1,340.62 - 1,546.87 BTC
Net income per week: 5,634.21 - 6,501.01 BTC

Mining a block rewards 25 BTC and 6 - 7 blocks are mined hourly, depending on the increase of the hashrate.

So there are 150 - 175 BTC mined each hour, 3,600 - 4,200 BTC each day and 25,200 - 29,400 BTC each week.

Or in total 327,600 - 382,200 BTC are mined in 13 weeks and 378,000 - 441,000 BTC in 15 weeks.

This means:

ASICMINER generated an income which equals 23.72 - 31.94 % of all mined coins in this quartal.

Subtracting the expenses (i.e. electricity and hardware cost) results in a net income of 19.16 - 25.80 % of all mined coins in this time frame.

The balance sheet shows that there are 5,484.66 BTC, 393,202.00 USD and 15,318,262.72 RMB in assets, whereby 5,484.66 BTC and 4,480,310.50 RMB are in form of cash.

With an exchange rate of 6.087 RMB/USD and 198.28 USD/BTC this equals:

ASICMINER owns assets with a BTC value of 20,159.64 BTC (with 9,196,81 BTC in cash)
Or converted to their USD value: 3,997,254.14 USD (with 1,823,544.13 USD in cash)
Or converted to their RMB value: 24,331,285.96 RMB (with 11,099,913.17 RMB in cash)

(104622-20109)*3/53 = 4876 BTC per week
which is 0.012 BTC per week per share, which is what we saw more or less.

This is an effective share of 15% of the network over the last quarter.

Not clear on the time period (which is very important) but this would indicate a quarter.

But, I'm having trouble reconciling it with the cashflow statement.

Notice also that expenses go down in BTC terms since the recent price rise.

Of course, past performance is no guarantee of future performance.

[ex-trader]

Three problems with claiming there's any glory in these statements.

1. The income is not all mining it's part hardware (a big part), and the price and demand for these has tumbled.

2. The average hash share over the period was maybe good, but it's 3 months and it basically declined through the period, it started in the 10-20% range of the network and ended at 1-2%. The most relevent one is the current levels. From 29/7-29/10 ( 3 months) AM hashrate rse slightly from 38 to 62 TH, but the network grew from 223TH to 2798TH.

3. Having 4m USD equivalent sounds good, but thats a Net Asset Value of only 0.04 BTC/share. Thats not to say this determines price, but it bascially should have negligible influence on the actual value.

[dexX7]

(104622-20109)*3/53 = 4876 BTC per week
which is 0.012 BTC per week per share, which is what we saw more or less.

This is an effective share of 15% of the network over the last quarter.

How do you come up with 15 % or 4,876 BTC per week? This would take 17.33 weeks to cover the net income of 84,513 BTC. A quarter covers 1/4 of a year, not 1/3.

The last financial statement was published on 23 July 2013. The time span between Oct 27 and Jul 23 is 96 days or 13.71 weeks. I covered 13 - 15 weeks to include some buffer and came up with 19.16 - 25.80 % of all mined coins and 23.72 - 31.94 % without expenses.

But, I'm having trouble reconciling it with the cashflow statement.

The expenses were listed with 210,119.50 USD and 12,680,873.16 RMB. With an exchange rate of 6.087 RMB/USD this is combined 2,293,390.92 USD. BTC nominated expenses are stated with 20,109.31 BTC.

2,293,390.92 USD/20,109.31 BTC = 114.05 USD/BTC

This exchange rate seems plausible, so I guess the expenses listed in the income statement are the same as in the cash flow statement/expense breakdown.

Edit:

Three problems with claiming there's any glory in these statements.

1. The income is not all mining it's part hardware (a big part), and the price and demand for these has tumbled.

2. The average hash share over the period was maybe good, but it's 3 months and it basically declined through the period, it started in the 10-20% range of the network and ended at 1-2%. The most relevent one is the current levels. From 29/7-29/10 ( 3 months) AM hashrate rse slightly from 38 to 62 TH, but the network grew from 223TH to 2798TH.

Yup, that's true. To increase the income something must be done of course. From 02 October 2013:

8. Financial Report
The next official ASICMINER Financial Report is scheduled to be released on October 20s. We had been in the process of accumulating reserves for a two-year-based small lab (all salaries) and a full mask cost for 40nm for one month. Additional income may be reserved for other chip advancements.

This sounds as if the process of accumulating reserves was already finished when this post was published. Without further information there is no way to determine, if gen 2 hardware is already in production or not though.

[Lohoris]

there's still 131,000 shares outside of Havelock. What's happening to those shares? I am not seeing panic selling on the auctions forum here. Are there other major BTC boards or forums where people trade BTC stock?

You could look at the direct shares list to know if they are being aggregated somewhere or not (I guess not).
I guess most people who still have some shares are in "wait and see" mode.

[webbrowser]

A lot of people are pissed right now because they bought in to the hype when the whales were quietly making their way to the exits. They deluded themselves.

Did they?

If I count correctly, the publicly traded shares on bitfunder + havelock amounts to just 25k full shares, out of 400k total.  Not sure how many are issued on 796.  Regardless of whether the whales traded privately to exit, the bulk of the shares are still held privately by other whales.

[SebastianJu]

I would like to ask friedcat too that he is releasing infos in this thread or in the rep-forum. I guess if a chinese girl can ask him then most probably there is someone in rep-forum who can ask friedcat too so we get the infos fast.

I guess infos first given to big shareholders is not a problems since where should they sell 5000 shares fast? I dont see how.

If I were in friedcat's position I would do exactly what he seems to do:
- keep hashing with existing hardware that has already been paid for multiple times,
- research new hardware tech to be ready to put it online ASAP,
- keep selling what customers want to buy and maybe install what is not selling quick enough/is partially defective in the mine to avoid wasting it.

Though the divs obviously show that the sales arent so great. So either he should order more chips to sell them or mine with them. Self mining at least has the advantage that its a relatively constant income stream.

He probably only complained because the divs... If we still would have the nice divs we once had the shareprice would be still high and no one would complain. Though the selling seems not to work too good and mining isnt built up.
Though it may be that deploying more own mining is a big work with not good return now since the old tech means way more work at deploying then newer chips mean.

I hope everyone purchased more shares now that they are cheap*, because as the following numbers may break some bear spines..

To put the ASICMINER financial report in some perspective:

...

Like ex-trader wrote... that includes hardware sales. Would you treat other miner selling companies like this you probably would get a network hashrate a multiple as big as it is really.

What i would like to know... when we had 30% of the network hashrate... we sold miners too... i guess if you calculate it your way we easily could have 100% of the total network at that time.

The share price has nothing to do with whether they maximized profit. AM got way overvalued because it was for a while the only ASIC company with a good reputation that you *could* invest in. The correction was inevitable.

Thats not correct. When it was at 4.5BTC the shareprice was so high that it had a 30% annual profit. Now the shareprice again is 30% of the annual return the divs are bringing. So no, the shares werent overpriced back then. Otherwise it would mean the shares are overpriced now too.

[Rival]

It does not take a genius to see the obvious trend of AM share value matching the 30% APR of dividends.

What apparently it does take is a genius to realize is that FC has literally eviscerated the dividends over the last few months in order to raise millions for reinvestment, and so basing the AM share value on dividends alone is using deficient logic. If all of that income diverted to reinvestment went into a black hole and lost forever with no return whatsoever, then one would expect the current value of AM to be reasonable at 30% APR. If you believe that all of the dividends held back are gone forever with no possibility of return on them, then for you the current price is correct.

On a basic level, if one were to assume that FC held back 50% of dividends, then by the rationale above the share prices should be worth at least double what they currently are.

To extrapolate, if one assumes that for every btc FC holds back now he will generate 2 btc in profit later, then the correct price of a share should be 4x the current value.

Usually stocks are priced to accommodate expected future dividends, not purely an expression of historical dividends. When dividends are held back for reinvestment and expansion, the historical data is much less valid.

[prancing_around]

Once AM rolls out the blockchain based exchange, or if BTCT resurrects, we will start to see the true value. 

Is there any estimated date for when the blockchain based exchange will open?

[velacreations]

demand for these has tumbled.

citation required

as far as I can see, AM has sold out of hardware, so that doesn't indicate that demand has decreased.

[webbrowser]

demand for these has tumbled.

citation required

as far as I can see, AM has sold out of hardware, so that doesn't indicate that demand has decreased.

You do realise that price is the intersection of demand and supply, and you cut out the part where he pointed out that price tumbled?

And yes, the price was tumbling even before the new 500TH.

[gyverlb]

Thats not correct. When it was at 4.5BTC the shareprice was so high that it had a 30% annual profit. Now the shareprice again is 30% of the annual return the divs are bringing. So no, the shares werent overpriced back then. Otherwise it would mean the shares are overpriced now too.

That's a shortsighted view: back then it was obvious that ASICMINER wouldn't be able to maintain its network share indefinitely without eating the profits to reinvest. The value of a share shouldn't be linked to the short-time dividend history but take their future evolution into account (after all past dividends have zero value for someone buying shares, only future ones do).

The question today is if ASICMINER will be able to raise its future dividends. The last ones were nearly 100% mining income and 0% hardware sales. As they are on the path to gen2, if there's no accident obviously in the future they will raise hardware sales and maybe mining income too.

This is why I think it made sense to sell at 4.5 and it makes sense to buy now. Basing sell/buy decisions just on the last dividends is a recipe for losing bitcoins in my opinion.

[SebastianJu]

Thats not correct. When it was at 4.5BTC the shareprice was so high that it had a 30% annual profit. Now the shareprice again is 30% of the annual return the divs are bringing. So no, the shares werent overpriced back then. Otherwise it would mean the shares are overpriced now too.

That's a shortsighted view: back then it was obvious that ASICMINER wouldn't be able to maintain its network share indefinitely without eating the profits to reinvest. The value of a share shouldn't be linked to the short-time dividend history but take their future evolution into account (after all past dividends have zero value for someone buying shares, only future ones do).

The question today is if ASICMINER will be able to raise its future dividends. The last ones were nearly 100% mining income and 0% hardware sales. As they are on the path to gen2, if there's no accident obviously in the future they will raise hardware sales and maybe mining income too.

This is why I think it made sense to sell at 4.5 and it makes sense to buy now. Basing sell/buy decisions just on the last dividends is a recipe for losing bitcoins in my opinion.

Right... shareprice should look different... but you can see its relatively strict connected to the divs. And i think its not a miracle why this is the case. Friedcat is relatively silent and this means doubts. Of course we can think it will jump to 2BTC soon... we only dont know.

And even if its relatively certain... selling now could still make sense because we dont have a clue if the price wont drop to 2.5btc soon. A loss never could be made in by divs in the short time. That means one could buy the double amount of shares then. (Except big shareholders of course.) But the small traders "make" the prices and the orderbook is way too thin.

When i look at the market... Asicminer is at 0.64BTC and ActiveMining at 0.0008BTC. They both work on 28nm process node if im not mistaken. Both have shown in the past that they can do IPO's though friedcat is the only one that has shown he can bring out ASIC's. Asicminer has 400,000 shares while ActiveMining has 10,000,000 shares. Thats 25 times more. So ActiveMinings Price compared would be 0.02BTC to get the same percent of the company like one asicminer share has. Both have relatively good chances to succeed but only the divs keep asicminer's share price high.

If the shareprice really would be set because of future grows then activemining should be valued way higher i think.

[canth]

Right... shareprice should look different... but you can see its relatively strict connected to the divs. And i think its not a miracle why this is the case. Friedcat is relatively silent and this means doubts. Of course we can think it will jump to 2BTC soon... we only dont know.

And even if its relatively certain... selling now could still make sense because we dont have a clue if the price wont drop to 2.5btc soon. A loss never could be made in by divs in the short time. That means one could buy the double amount of shares then. (Except big shareholders of course.) But the small traders "make" the prices and the orderbook is way too thin.

When i look at the market... Asicminer is at 0.64BTC and ActiveMining at 0.0008BTC. They both work on 28nm process node if im not mistaken. Both have shown in the past that they can do IPO's though friedcat is the only one that has shown he can bring out ASIC's. Asicminer has 400,000 shares while ActiveMining has 10,000,000 shares. Thats 25 times more. So ActiveMinings Price compared would be 0.02BTC to get the same percent of the company like one asicminer share has. Both have relatively good chances to succeed but only the divs keep asicminer's share price high.

If the shareprice really would be set because of future grows then activemining should be valued way higher i think.

Let's not forget that there are ~ 400K AM shares vs ~ 10M ActM shares. Assuming they ever reach the same market cap it would be 0.64 BTC/share for AM vs 0.0256 BTC/share for ActM.

[velacreations]

You do realise that price is the intersection of demand and supply, and you cut out the part where he pointed out that price tumbled?

And yes, the price was tumbling even before the new 500TH.

"tumbling" is an inaccurate description.  The price had been reduced a few times, but demand has not been reduced. 

Prices were still higher than reasonable ROI, so that's an indication that demand is still very healthy.  Sure, prices had to come down as the network expands and competition came on to the market, but AM sold all of the hardware they had for sale.

If demand had been reduced as well, price would have dropped a lot more to increase demand.