Quote from: burnside on June 30, 2013, 07:22:48 AM

Quote from: Entropy-uc on June 30, 2013, 07:12:19 AM

In the real world there is a syndicate of investment banks that take on filling the IPO. They spend a few months getting interest from large customers and determining a reasonable valuation. On the IPO date the first trades are all filling earlier commitments to buy at the price finally set by the banks. All of the banks have money on the line themselves and are expecting to support the share price.

Maybe if mods voting yes were required to hold some amount of stock for 30 days or so you would both get better reviews, and have a clear signal of investors appetite for a particular issue.

That's a great idea. Maybe when investors vote they could plug in the number of shares they'd be willing to commit. Their vote wouldn't be tied to it, but it could be used as a weighing mechanism, and whatever they plug in they would be bound to. (site would reserve it and auto-execute somehow at ipo.)

Maybe even better would be to allow ALL users to pre-commit on pending assets. The amounts designated would go in reserve before the IPO, and the shares purchased would be locked after IPO for some specific time frame. Then IPO's would be limited to some percentage of the pre-commitments. IE, an IPO would not be allowed to release more than 150% or 200% of the pre-committed share count.

It'd also be a great way to prevent the situations where an issuer needs XXX amount to get started, then only raises 50% of that in the IPO.

Lots to think about.

For IPOs where the issuer needs XXX amount you could apply two simple rules:

1. The funds raised from sales are escrowed by the site until XXX is raised - or reversed to all shares (and the IPO closed) if XXX isn't raised in Y days/weeks.
2. Issuer account is locked against transferring shares or selling at below a declared IPO price until 1. is met.

Number 2 is a problem (as happened in the past with Ken) where the issuer gets impatient and starts selling cheap.
Number 1 would only apply where there was a minimum needed to achieve their goals. If they fail to reach that in a reasonable time period (weeks not months) then the IPO has failed - so just return the cash, delist it and move on. You have to lock a lot of account functionality to do that - otherwise issuer an just transfer funds to an alt account and reuse it to buy more shares inflating the count of what was actually sold.

I think you're still not clearly understanding the main problem with AMC btw. The problem is that its structure so that even if it DOES make profit from hardware sales under 5% of it ends up with investors. How much less than 5% depends on a definition of 'profit' imposed by VMC (which shareholders have no say in or oversight of) - which makes the 'no salary' clause of AMC worthless (as Ken can give whatever he wants as salary to himself/friends/family before profit comes anywhere near AMC) and on how much profit is made. To get 2.5% return on capital requires $2 million profit on sales to be made - that's sales of ASICs that won't even be out until end of this year/early next by KEN's estimate.