Quote from: Vycid on August 17, 2013, 07:18:11 AM

Quote from: Franktank on August 17, 2013, 03:31:38 AM

Quote from: DeathAndTaxes on August 17, 2013, 03:29:26 AM

Quote from: Franktank on August 17, 2013, 03:26:38 AM

Quote from: DeathAndTaxes on August 17, 2013, 03:21:00 AM

Quote from: GodHatesFigs on August 17, 2013, 12:04:24 AM

I'm well aware of transaction fees; their potential simply does not justify ASICMiner's P/E of 100, especially as their first mover advantage is about to come under fire. The magnitude of the hype around this company is unreal.

How do you come up with a P/E of 100?

P/E = (share price)/(earnings of last 6 months*) = 4 BTC/0.5 BTC -> P/E of 8

*should be "earnings of last 12 months but AM's only been mining for 6 mos.

Correct or no?

P/E is annualized so you should convert the earnings of the past x months to 12 months before computing the P/E.
Still I wanted to see how the person I was responding to computed a P/E of 100. I have a feeling it will be "fun".

In order for AM to have a P/E of 100, share prices would have to be 50 BTC/share. I'm bullish on AM but I don't see that as a possibility (at least in the near term).

EDIT: I can confirm that they've paid 0.50 BTC/share, I've kept record of every single dividend payout since Feb 28 (first payout).

Share prices of 50 BTC/share would be a market cap of 20 million BTC. Forget the near term - this will never happen, which should be immediately obvious given a long-term bitcoin money supply of 21 million.

Theoretically it's possible to have such a valuation. Because it will never happen that all shares will be dumped at once. If someone dumps a significant amount of them the share price will decrease.