Display MoreI understand the owner of the casino has already set a course of action. I would have recommended the problem and his thought out solution be put out there for community comment prior to the decision being made. Thinking long and hard and consulting with one or two people seems to be short changing the community potential. Especially one that has a vested interest in the casino. Especially when the decision just needlessly (IMO) slashed the asset value in half.
Consider the following:
The casino lost 22-23 million burst. Apparently in one week. If I recall a few weeks back we had a payout of about that much. I don't recall the asset doubling in price prior to the payout or loosing half its value after the payout. That's because the asset price is not set by the payouts. Its not set by the bank roll or lack of one either. Certainly not set by the owner. Its set by the buyers and sellers which is based on whatever they value. They valued the casino at 400 (even after the loss). When the owner announced a 50 burst per asset and a 4:1 exchange he in effect became the market and the old asset dropped to his artificial price of around 200 (why buy 1 at 400, convert to 4 (100 a piece for new) when you can buy at 50). That comes to a haircut of 200 million burst. All over a 23 million bank roll loss? At the market price of 400 per asset 23 million comes to 57,500 contracts. The owner could have came out and said, hey we lost the bank roll. We will need to raise funds with a 6 percent asset dilution sale based on current price or if we can't get 400 then the dilution may be higher as we will need to sell more. I would have given the market and the community a chance. 23 million is nothing. (A 6 percent dilution most likely would not have hurt the price to much, certainly not 50%).
How about this one. Hey guys, remember that nice fat payout a few weeks ago. We need it back.
Heres one. We lost the bankroll. We need investors. We will issue x shares of whatever and it will pay 10% interest. You will be paid back with interest and then the asset becomes worthless.
How much is 200 million burst worth? Can we not take the time to think a bit more on this?
I suspect the motive for this plan is not the bank roll. Why destroy 200 million in value because 23 million was lost?
In addition:
Assuming buyers continue to value the casino as they did before it's logical that the price would go back up to pre-problem price which would be 100 per contract (Once the owner sells the assets at below market price the market will once again take over). However it is not likely the market will do this until the earnings catch up to the dilution that has taken place. I'm not speaking of the 4:1 exchange but the other 6 million or whatever it is. As I said before buyers and sellers determine price however I would give a lot of weight to earnings per contract. Buyers like making money.
One more thing:
I didn't see anything in regards to how the 50 per share will be sold. Is this going to be another whale sale at 50 and everyone else buy in higher.
Ok, there is one more.
Isn't it well known a big player can drain a bank roll if they are allowed to win to much of the bank roll in a single play? Even with your changes wouldn't it make sense to set a side some of the profits so that a bank roll can be replenished rather then further asset dilution?
Please re-think your plan.
aa quote from @TXHardWorker explains things quite perfect. in why the asset is now valued at 50.
QuoteYou're a business, and you go IPO. BurstMart. BurstMart sells 100 shares for 100 dollars, and receives $10,000 in income and has that as retained earnings.... Over the course of a couple of years, they make income and distribute profits that equal out to another $10,000 total, or an additional $100 per share. So the business now has $20,000 dollars....
During this time, because BurstMart is so great, the public trading of it's stock has gone up and down, but is currently at $400. $400 has NO relation to the business currently, because they already sold those shares and got money for them.
Suddenly, a crisis comes along, and it is decided to do away with the current stock, and reissue NEW stock at the current value of the COMPANY, not the stock.... what is the company worth??? The company is worth $20,000. NOT $40,000. SO, to re-issue any number of shares it has to be equal to $20,000. Either 100 @ $200, or 200 @ $100, or 400 @ $50, etc....
obviously the amount had to increase from 1 million assets to fund another bankroll to get the casino started again.
the asset issuer wont necessarily flood the market with them causing them to lose value. and will obviously do releases in chunks to build the bank roll. having 10 million makes it so if the bank does go bust again theirs enough shares left to rebuild and add to it.
however at the end of the day the casino has never really sold any of their assets at the value of 400 burst per share. and was only ever 100-200 burst per share.
ugh..... its to early for me to do this stuffs
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