ASICMINER: Entering the Future of ASIC Mining by Inventing It

[jimmothy]

about that infinite loop of reinvestments, how can you explain this (one month ago) :

The dividend schedule will be aggressive, as AM will not require large sums of retained capital. The rationale is that AM doesn't need to invest large sums into infrastructure and that the majority of chip production costs will be covered by the business partners on a contract schedule. The new round of dividends are scheduled to begin as soon as the first large purchases have concluded and should precede or coincide with the publication of the updated financial statements.

Let's just write another round of questions. FC said, that he will glad to answer them.

This is just speculation but I think FC was expecting the chips to arrive 1 month earlier and with much better specs which may have cost us our "aggressive dividends".

However I think the "no large sums of retained capital" is somewhat of a misunderstanding. It is simply impossible to sell $25 million worth of chips without spending a few million to produce the wafers.

But yes I do agree it would be a good idea to write up another round of questions.

[bitcoin.newsfeed]

1) On the Balance Sheet, approximately how many chips does the current Inventory (Products + Materials) represent?

2) How many months of inventory do you estimate that represents?

3) On the Cash Flow there was significant expenses for gen3 production (~6mil USD). Does that represent the bulk of gen3 expenses, or are the expenses for gen3 going to continue (additional wafer batches ordered, etc.)?

4) When will dividends start, and how frequently will they occur?

5) What is the status of gen 3.1 (shipping to customers, I think?)? How much does it help with energy usage -- do we have final chip performance numbers yet?

6) What is the progress on gen4?

7) What is the status of self mining? What is the rollout schedule for the data centers?

+1

8 ) What is the status of franchising partners? When can we expect to see income from them?

9) Can you please clarify this sentence from 21st April : "The dividend schedule will be aggressive, as AM will not require large sums of retained capital." < is this still actual, or meanwhile something changed?

10) What is the average selling price of AM gen3 chips (price per Gh/s)?

11) Can we please get weekly, bi-weekly or monthly updates about progress, plans, sales etc. for preventing FUD in this thread?

* What is that ~4M CNY in financial report/expenses at exchange?

* Can you please care more about your shareholders ?

[bkminer]

Wow of course Havelock pics today to not show my deposits after 9 confirmations and be so slow as to lose my two price marks on buying AM1....

[Franktank]

Until more information is provided, all of this is conjecture based on partial information. He has not stated that the funds from the first batch of May chips would be used future batches and the assumptions made after the financial post clearly conflict with the previous info from Jutarul. It's advisable to wait for correct information than to panic from the sporadic postings of a few.

Here's the direct shareholder list (current as of March 30th):

https://docs.google.com/spreadsheets/d/1Dy2BQlPn8cd9tyq9wQv7dciZCiWEjNzNvCgmaIcJAA8/edit#gid=0

If things were in complete disarray, would not the larger shareholders (who have significant BTC invested) actually voice their opinions and concerns to friedcat? Unlike the speculators here (hoping to catch cheap shares), they're still waiting. That should say something to the rest of us.

[xhomerx10]

so he just paid all income from batch 1 for producing batch 2, and all income from batch 2 will be used for producing batch 3 etc?

Yes, that is how I am guessing it will happen. If we guess batch 2 is 20PH being sold at $0.5/gh that would earn ~$10,000,000 which would be enough to purchase 50PH worth of wafers which could then be sold for $25,000,000.

Basically turning $4 million in to $25 million.

*Numbers are extremely approximate but I think it shows why reinvestment is a good idea.

I think the question is, have we entered in an infinite loop of reinvestments, or someday those gains will be paid as dividends?
What happened to those aggressive dividends?

It wouldn't really be an infinite loop of reinvestments in my made up scenario since the reinvestment amount would be doubling per batch.

about that infinite loop of reinvestments, how can you explain this (one month ago) :

The dividend schedule will be aggressive, as AM will not require large sums of retained capital. The rationale is that AM doesn't need to invest large sums into infrastructure and that the majority of chip production costs will be covered by the business partners on a contract schedule. The new round of dividends are scheduled to begin as soon as the first large purchases have concluded and should precede or coincide with the publication of the updated financial statements.

Let's just write another round of questions. FC said, that he will glad answer them.

 I don't profess this to be an explanation but the simplest answer would be: There were no business partners who wished to cover the production costs or contract the chip production.

[murfshake]

The king is dead.  

After reviewing the financials I can't see how they can ever come back after letting themselves sink for so long.  How do you go from being the only person with the technology in the world and constant 25% of the hash power to essentially a worthless junk stock in a matter of months.

How sad.  

Glad FC and friends got rich but he should be ashamed of himself for letting it slip so far before trying to bounce back.

[freedomno1]

I can see why the market recoiled with only 20 BTC and conversions being incredibly difficult this is a problem.
AM would have an easier time just mining instead of reselling chips to distribute dividends, in a sense the Fiat restrictions directly affect the ability of the company to make distributions.

ASICMINER HAS 100,000 BTC equivalent (Convert at $600=1 BTC) of Materials also known as 6 million dollars and almost 2500 BTC or 14.2 million in Products with that much liquidity the value of AM is significant to say the least.

Fair Market Value of around 0.41 BTC

Challenging
I am concerned though about the companies owners equity

Tentative Conclusion
This is a company flush with cash inventory and supplies not something that is on the dredge of destruction, with NO LOANS and PURE EQUITY
The main problem being that equity is held in Fiat and not Bitcoins

Need to read these numbers more

[jimmothy]

The king is dead.  

After reviewing the financials I can't see how they can ever come back after letting themselves sink for so long.  How do you go from being the only person with the technology in the world and constant 25% of the hash power to essentially a worthless junk stock in a matter of months.

How sad.  

Glad FC and friends got rich but he should be ashamed of himself for letting it slip so far before trying to bounce back.

So selling 10% of the network hashrate and having another 20PH worth of hardware to sell along with loads of assets = worthless?

[MrTeal]

I can see why the market recoiled with only 20 BTC and conversions being incredibly difficult this is a problem.
AM would have an easier time just mining instead of reselling chips to distribute dividends, in a sense the Fiat restrictions directly affect the ability of the company to make distributions.

ASICMINER HAS 100,000 BTC equivalent (Convert at $600=1 BTC) of Materials also known as 6 million dollars and almost 2500 BTC or 14.2 million in Products with that much liquidity the value of AM is significant to say the least.

Fair Market Value of around 0.41 BTC

I am concerned though about the companies owners equity

Tentative Conclusion
This is a company flush with cash inventory and supplies not something that is on the dredge of destruction, with NO LOANS and PURE EQUITY
The main problem being that equity is held in Fiat and not Bitcoins

Need to read these numbers more

I think you need to read your numbers a little more.

[bitcoiner49er]

[arnuschky]

Well, it all depends on the worth of the inventory and the processes already paid for.

If I understand correctly, the NRE (masks) are all paid for.
Furthermore, AM produced a bunch chips.
We sold 1 batch of these, which paid for the whole production.
Now the key question is: how many chips are left?

What people don't realize: for gen3, the majority of the cost occurred already, and have been paid for with the first batch.

[xhomerx10]

Now if I were to simply post a +1 to this, my post would be deleted...  how can a picture be worth a thousand words whereas a +1 be worthy of a deletion.  Aren't the both representative of the same idea?
Oops, I mean Asicminer - yay! Entering the future blah blah blah  <--- it's okay, I'm topical now.

[arnuschky]

Bookkeeping questions:

 - the "products" line in "assets" lists value of the chips produced (their production and material cost), and
 - the "materials" line in "assets" lists the unused materials bought (wafers and powerchips)

Is my understanding correct?

[RoadStress]

So selling 10% of the network hashrate and having another 20PH worth of hardware to sell along with loads of assets = worthless?

So the money from the sales got reinvested into more wavers? All of them?

[freedomno1]

I think you need to read your numbers a little more.

I'll just sit in the corner and munch some popcorn was still processing those numbers.
I guess I don't like sitting in Fiat (hmmm gen 4)

[jimmothy]

So selling 10% of the network hashrate and having another 20PH worth of hardware to sell along with loads of assets = worthless?

So the money from the sales got reinvested into more wavers? All of them?

Yes that is what it looks like.

Another way to look at it is AM bought 28PH worth of wafers, sold 8PH to cover production costs, and is now left with 20PH.

[server]

 
Chips will be sold with a loss and profit will be made in other companies ?

[xhomerx10]

Having just caught up on the last few pages in this thread, there seems to be an interesting dichotomy between established members and newbies on how they view the recent news. I can't say I have a reasonable view on it all at this point, but I'll still grab the popcorn and watch it all unfold.

 Well enjoy the popcorn but don't munch too loud!

 http://www.examiner.com/article/man-shot-and-killed-for-munching-popcorn-too-loud-during-black-swan
 
 edit - intended only as humour.

[bitcoin.newsfeed]

Chips will be sold with a loss and profit will be made in other companies ?

ELI5 current situation :

FC purchased materials for 5$ , made 10chips, sell them for 20$, then he purchased materials for 20$ and made 40chips, sell them for 80$, then he purchase material for 80$ and sell it for 320$, but again, he'll purchase material for 320$ ... and cycle continues. He's providing R&D of mining chips for whole Chinese market from own resources and then hes unloading tons of underpriced chips to his friends, or his other umbrella companies. Sadly for us is that real profit is creating elsewhere, not in AM anymore, AM is tunneled. AM is just used donkey.

It seems like this until we get answers to new round of shareholders questions. And we need answers asap. So if someone wants to add questions to the list provided before, please do. Friendlypumpkin will forward them in 1-2days.

[freedomno1]

Keeping the Questions on the Current Page to simplify it first thing people see

1) On the Balance Sheet, approximately how many chips does the current Inventory (Products + Materials) represent?

2) How many months of inventory do you estimate that represents?

3) On the Cash Flow there was significant expenses for gen3 production (~6mil USD). Does that represent the bulk of gen3 expenses, or are the expenses for gen3 going to continue (additional wafer batches ordered, etc.)?

4) When will dividends start, and how frequently will they occur?

5) What is the status of gen 3.1 (shipping to customers, I think?)? How much does it help with energy usage -- do we have final chip performance numbers yet?

6) What is the progress on gen4?

7) What is the status of self mining? What is the rollout schedule for the data centers?

8 ) What is the status of franchising partners? When can we expect to see income from them?

9) Can you please clarify this sentence from 21st April : "The dividend schedule will be aggressive, as AM will not require large sums of retained capital." < is this still actual, or meanwhile something changed?

10) What is the average selling price of AM gen3 chips (price per Gh/s)?

11) Can we please get weekly, bi-weekly or monthly updates about progress, plans, sales etc. for preventing FUD in this thread?

* What is that ~4M CNY in financial report/expenses at exchange?

* Can you please care more about your shareholders ?

12) What is the cash flow ratio between the amount of Chips Fabricated and the percentage of the batch that is dedicated to cost.

*  What is the Break Even Point of this batch of Chips?

13) What is the estimated conversion time from chip sales to dividends?

14) Will the funds from future Gen 3 chips be used to fund Gen 4 chips or distributed as a dividend, and what relative percentage of income will be used for Gen 4?

15) Previously our Asicminer farm was mining bitcoins and distributing a weekly dividend, will Asicminer update its present hash rate in the mining farm to account for current difficulty changes and to procure a secondary supply of Bitcoins to adapt for rapid changes in Bitcoin prices?
______

Finally read through it and interpreted the data
Now I want to know the cash flow ratio which is the amount of Chips Fabricated and the % of it that is cost
From 0.49-0.99/GH is the range to sell how much of that is profit for the shareholders.

Either way all the money went back into Wafer production and FC exchanged 4 K BTC to fund this batch but did not state the average exchange rate at the time of conversion, which might have been above the present exchange rate.

So selling 10% of the network hashrate and having another 20PH worth of hardware to sell along with loads of assets = worthless?

So the money from the sales got reinvested into more wavers? All of them?

Yes that is what it looks like.

Another way to look at it is AM bought 28PH worth of wafers, sold 8PH to cover production costs, and is now left with 20PH.

Based on sales that might mean B/E or Break Even was reached and the rest of the batch is profit so that is another way to calculate it without needing to consider percentages.

Would mean its selling around 71.5% profit to cost
8/28 = 28.5% Cost of Production
Munches popcorn quietly (I guess I will slurp the Slurpee ^^)