Quote from: Deprived on September 05, 2013, 06:01:57 PM

Quote from: ventolin on September 05, 2013, 05:38:44 PM

Quote from: burnside on September 05, 2013, 04:37:40 PM

Quote from: ventolin on September 05, 2013, 04:02:58 AM

Who can explain me? Why any Issuer can easy increase number of shares?

It had 2 type of issuers.

First type. Look for example in history data:
1. https://btct.co/security/ACTIVEMINING 2924534->3069481->3071989->3074084, Outstanding 3074084 / 25000000 Issued.
2. https://btct.co/security/BASIC-MINING ...50000->51625, Outstanding 51625 / 1000000 Issued.
3. and other...

How I understand market cap of ACTIVEMINING is 0.005497*25000000 = 137425 BTC, it's looking huge.
Or BASIC-MINING is 0.149*1000000 = 149000 BTC, it's actualy huge for 1435 Gh or 103 per 1 Gh.

It's ability give issuer to sell evrytime and price can fall 200 times as BASIC-MINING until normal gigahash price.

Second type a bit worse.

1. https://btct.co/security/COGNITIVE 8619->9032->8619>8620->8629->8809->9709->10420, Outstanding 10420 / 10420 Issued.

This issuer just change Details in Contract & Prospectus and drop new shares into market.
Issuer made it without preffered offer to old shareholder by special price. Is it correct?

May be BTC-TC is big scum? Explain me please!

And sorry for my english.

Very valid concerns. An issuer cannot issue new shares nor change their contract on their own. I have to do it.

On bonds, mining contracts, futures, funds, passthru's, and managed portfolios I adjust share counts by request of the issuer. On revenue shares and 'stocks' I only do it if a motion has passed.

That said, there are definitely ways majority holders and issuers can game the system, just like in the real world. Don't put you coins into the site unless you have read up on an asset and you are confident it is something you want to be involved with.

Cheers.

OK! You answer about second type - it's just my mistake about COGNITIVE (may be).

Real danger for minor investor is fuzzy number of outstanding shares. bASIC-MINER for example. Outstanding 51625 / 1000000 Issued.
Market cap is shares price multiplay by outstanding shares. If Issuer increase it as bASIC-MINER from 50000 to 51625 shares price decrease in inverse ratio.

Nobody in stock market did same things. Evrytime when Issuer want to make new outstanding he must offer by special price new outstanding to old shareholder in extraordinary order. Otherwise major shareholder can make fraud in the law. Please look example above https://bitcointalk.org/index.php?topic=125629.msg3085484#msg3085484

Sorry again for my english, but I see here easy ligal way how to fraud vs minor shareholder. In real life it is posible with weak statute where not provided with special offer issue of shares.

P.S.: In BTC-TC present only 2 clear company who define minors: LABCOIN (Outstanding 10000000 / 10000000 Issued), COGNITIVE ( Outstanding 10420 / 10420 Issued). Other is fraud in law. burnside, please, change the law!

The situation isn't quite as bad as you think.

For example on BASIC-MINING the extra increase in shares was done by issuing new shares in return for a BFL mini-rig. It was definitely a good deal for existing investors (and a horrible one for the guy with the mini-rig - as he took shares valued right at the top of a bubble) and was approved by shareholder vote that passed with over 80% YES votes.

Active-mining is really a pass-through to the main issue on Bitfunder (as it as launched on Bitfunder without there ever being a shareholder vote to convert it to a dual listing). The maximum shares were set before a change in the structure of the company and should really be reduced to the current actual maximum. Unfortunately AMC has been pretty terrible all along when it comes to clearly explaining, reporting and sticking to a plan on sale of shares.

I certainly agree with you that in a lot of BTC companies there is significant opportunity for a controlling interest to act against the interests of smaller investors (something which is illegal in nearly all countries). But the most blatant ways of doing that don't involve issuing new shares at all. And remember that what are reported as shares on securities aren't actually shares for the majority of securities : most are things like bonds or units where there doesn't need to be control of issuance/redemption provided the issuer doesn't do things which would break their obligation to investors (things such as buying back units above NAV/U or selling units below NAV/U in funds which have the ability to constantly issue new units).

The thing that most needs to be stamped out in my view is securities changing the contract mid-IPO. Especially where they set targets that must be reached then remove them when it becomes apparent they won't be hit. If a contract needs a change mid-IPO then the IPO should be aborted, all funds returned, the security delisted and moderator votes removed. Then when they've changed the contract they should go through the approval process again.

A contract needs to be something that's fundamentally set in stone BEFORE shares are sold - not something that's changed randomly as the IPO progresses (or fails to progress).

I understand you. And this is awful!
Btw DMS-MINING have hash power? Or you pay dividend from DMS-SELLING? Offtop, but I'm not trust you and you funds. Sorry man.

If Issuer need cash he must SELL REAL SHARES.