Quote from: metavox on June 07, 2013, 02:15:44 PM

Quote from: philipma1957 on June 07, 2013, 12:23:00 PM

Quote from: Aajo on June 07, 2013, 06:17:21 AM

pretty pointless discussion going on..
AM will make new price finding auctions as soon as its necessary, the update tells us it is still not.
Also the guess with 30-40$ cost per stick is propably much too high since the blades cost them around 100$ in production. The margin must be somewhat equal or they wouldnt take the hassle. My guess is 5-10$ for a stick.

so AM sold 1btc blade for 50btc. and a .3btc stick for 2btc

this was pushed into divs payout and divs have been huge.

All I am saying is 3 income sources;

1) blade sales
2)stick sales
3)mining

AM will not keep 1 and 2 as high as they have been. 3) is kind of fixed in BTC count 22-30% of the hash. So expect an adjustment in divs and in stock price.

Your basic analysis is correct, but your conclusions assume AM has no gameplan for this scenario. Any company selling products in a competitive space needs to assume this will happen. Products sell for premiums when there is minimal competition. Prices drop to increase sales volume when competition increases and demand lowers. Margins shrink. Meanwhile, any responsible company will already have a successor product in the pipeline to bring on the market when the conditions are correct (profit has dropped too far, old inventory has cleared, competitive environment is favorable, etc). The fact that they sold ~40% of their sticks at top premium price is amazing. I'm sure they will offer price reduction soon enough to move the rest of the inventory.

At this point, we're looking toward the first conclusion of a product cycle within the ASIC space as competition comes online. What AM does here is pivotal to investor confidence. If they have been planning well, we won't see a huge change in business performance. If they haven't planned for this, we'll see the gap you are predicting. Place your bets.

I also think the OPs point about the share price dropping is probably not right. The dividends are not going to be this high forever. I think everyone knows this and this is priced into the share price. At the current dividends you have an annual return of something crazy like 52-65%(ball parking). I don't think people are going to be dumping shares in droves because they will only be getting a 25% annual return. Especially when there aren't many actual ways to put saved bitcoins to work. If AM continues to keep their share of the total hash rate constant I don't think the share price will be dropping in any significance.

Huge dividends from hw sales are a nice bonus but a consistent 25% annual return is great compared to most other investment opportunities with your btc.