Quote from: qwertyqwerty on March 15, 2014, 06:36:10 PM

Quote from: Darkstone2 on March 14, 2014, 08:27:07 PM

Please explain how cryptx can make a profit on this operation unless A) they are shareholders themselves, B) overcharge hosting costs or C) overcharge hardware costs.

all of the above already applies, yet it's still entirely possible for all shareholders turn a profit and means they have direct incentive to care for progression of PETA project rather than a private competing mine

Any of the above invalidates petamine as an valid investment option. Also i would like a source on that statement.

Quote from: rdyoung on March 15, 2014, 08:19:23 PM

Businesses setup parent/subsidiary relationships all the time, and they sell or rent equipment or services to/from each other.
In cryptx/petamines case, its feasible for cryptx to sell the hardware to petamine at a small markup. As I have posted before, cryptx has incentive to not overcharge petamine per ghs because they will limit the amount of growth and therefore profit that can happen.

Is there something inherently evil or wrong with cryptx making a profit off of petamine?
If cryptx is able to manufacture mining hardware for say 3$/ghs and sells it to petamine for 4$/ghs is that wrong? Am I missing something where its wrong for companies to make money?
As long as they keep the $/GHS low enough that the mine stays profitable and preferably growing, what is the problem here?

There is nothing inherently wrong with an company making profit of an subsidiary. But there are many things wrong with the cryptx/petamine relationship.

Take a look at rental starter from Havelock. The owner of rental starter holds 70% of the company. The other 30% are distributed to shareholders. If rental starter makes bad business decisions, that will be his personal financial grave. If rental starter makes good business decisions, both the company and the shareholders will profit.

Back to petamine. Say, petamine makes horrible business decisions. For example, they buy hardware off cryptx for 2x the price of competitor products and have chosen the worst place to host their hardware. Will that be the downfall for cryptx? No of course not. They actually profit from such decisions. There is absolutely not incentive to not overcharge their products because cryptx doesn't actually benefit from the success of petamine. In fact it would be best to kill the subsidiary as soon as possible and create an new IPO next year when everybody has forgotten it. There is no financial benefit at all to keep petamine an healthy company as long as possible.

Quote from: Elvis Trout on March 15, 2014, 08:58:39 PM

However the rest of what you say is true. The bigger and better Petamine becomes the more they will earn in hosting fees and whatever else. I hope they do well out of this project as they put a lot of work in and ultimately our successes are linked.

That is not true. cryptx does not benefit from the success of petamine. The amount of money raised via IPO is fixed and cryptx gains 0% of the dividents. Provided these 2 satements are true, simple logic explains that it would be always better for cryptx to extract all money from petamine rather sooner than later.