Quote from: bodgybrothers on December 14, 2016, 07:37:35 AM

Quote from: lorylore on December 14, 2016, 06:14:19 AM

Quote from: bodgybrothers on December 14, 2016, 03:25:52 AM

If Dean chooses the capital raising via a dilution of shares, he will still own 70% of the total company value, including whats on the balance sheet and in the case of 2000bitcoin, he would own 1400btc in equity.

Regarding the above point, the 2k btc is a representation of the value of 30% of the company value, not the whole value. Dean also have mentioned that if the raised amount is 2000 btc, he has to sold the whole company at ~8000btc so that the 30% of investors will at least get back their original amount.

So in this case, assuming it successful raised 2.1k btc which will represent the 30% of the company, dean will automatically has the '70% stocks' worth of 4.9k. And this create also a bigger problem, the investors are not just investing to try to grab a bit in the profit like the old ways of betking. Now they also have to consider the estimate price of the whole betking and invest accordingly, otherwise if it is overvalue, it will turn out the 30% share will be traded lower than the ICO price and if dean want to raise more amount by selling his own share, it will 'add' more shares into the existing 30% market and further diluate the market.

This is the just the individual risk assessment that i made for myself.

Most of that is incorrect. I'll address your last point first. If dean sells his 70% shareholding, there is no dilution, there is still 100% shareholding, someone else gets the profits. If one person buys the 30% then decides to buy the other 70% they get then entire thing, they haven't diluted themselves at all. 1btc in profit is still split over all available shares. Current shareholding still gets the same return.

Now for the sale and value. Company valuation is a pretty intense field and there are people who dedicate their lives to valuations of companies. Houses are the same, a valuation is built on what the equity is worth plus the earnings. Lets use Amazon as an example since it fits this discussion. Amazon, for years, has lost money. Over this time it gets money to stay afloat from investors. If creates a new capital raising offer and investors buy into it. Even though this has been happening, and the company makes no profit, its share value still increases, because the general market believes they have a great potential in making money. So they raise capital and on each capital raising the existing shareholders benefit from that added equity. BetKing has no equity but has ability to make profit, investors are buying into this profit machine. The machine will always have value as long as it makes profit. The share value is in this profit generation ability.

Lets look at Musk and his Tesla business, Tesla just started making profit, but he sold shares in a company that was making a massive loss. How? Investors believed this business was going to be huge and risked their money on getting some of the action. This happens all the time on the stock market. Some go broke (dot com boom collapse - if you are old enough to remember) and life goes on. BetKing is a bit different to a startup and is more akin to the Amazon example where there is a brand and revenue. In Deans case most of the revenue goes to profit, in Amazons case the profit goes to R&D and business expansion.

There are hundreds of examples of selling something with no revenue and its all about the brand and ability to bring in future returns. Look at the facebook IPO, no profit, but worth billions. The value in investors on facebook was the huge userbase and potential to generate serious amounts of money. Meganet will have burnt all its investor funds within 12months, and if they don't produce a product, maybe they will raise more capital, and everyone will be happy. if they go broke, everyone is sad, but thats the risk they took when putting money in it.

Here is how you value betking. Get your future projections, subtract the operating costs (dean will further detail these I hope) and you have an income potential. say 600btc - 100btc = 500btc per year. total company valuation is 6666.666666btc (dean has a sense of humour - who would have thought). That's 7.5% return on valuation per year. The share value will always be retained, but like all shares could go up for down based on market demands.

Say that you want a higher return of 20% per year on your risk. Then you will need the casino profit to be 1333BTC / year. Now, if you don't think that will happen, you just don't invest and look for your 20% return trading forex or something with similar high risk. I personally think 10 to 15% is a return worth investing in - since that's hard to get in current markets.

As you can see, the amount someone invests, and moreso if someone invests, all depends on their personal risk profile. If you have a low tolerance for risk or you expect 100% return in 3minutes, you probably wouldn't be looking at investing anything in the first place. Right now property is a good investment, low interest rates, trump will create hyper inflation in the future (which will compound the property price and give you a relatively low mortgage).. can't go wrong in property right now if you have a low risk appetite.

I actually did a quick 5 year DCF on this...assumed (5%) growth and 30% WACC. People might be surprised at the valuation

Lanzador

Posts

Merits