Because greed.

yep very simple idea, the only issue is that greed overpowers rational thought in most people. meaning those promised a machine that spews out loads of coins per day only see dollar signs and think they are smarter for getting in first. well to those that think getting in first is the smart idea, here is something to think about

do they even have a working finalised PROTOTYPE ready for mass production?
if not, walk away, your not paying a pre-order your paying their R&D costs.

do they set limits to how many pre-orders they allow per batch?
if not, walk away, they have no clue how fast they can make machines, they just want as much money as they can grab.

if the delivery promise is over a month, and ROI is X months are you really profiting?
if not, walk away. alot of people find that a 3-12 month wait could have yielded them more profit playing the markets or even buying produce such as T-shirts, mugs etc and reselling them at a mark up value, repeating the process for the same 3-12 months.

unless a machine will actually give a ROI in under a month at time of delivery, knowing every 2 weeks the difficulty jumps. it is not that profitable to be on a waiting list.

instead invest your coins wisely else where

Thank you for that news bulletin!

Everyone is aware of the pre-order carrot dangle...but many are willing to gamble to get an advantage.

I think the tide has turned recently though in terms of the big mining stock scams and big losses on Labcoin, Avalon DIY, BFL...maybe more failures coming in the future.

There will always be speculators willing to gamble to make big money and the companies that try to lure those funds away.
It's up to the individual consumer to decide their risk level.

Hopefully going forward we will see more skepticism in the marketplace, but I think it will take more people getting burned to change people's attitudes. 

Personally I would like to see a "general standard of accounting and financial reporting" implemented at the exchange level.
If they don't do it themselves the SEC is going to do it for us....and nobody wants that.

The companies selling hardware need to be further along in their development schedule before actually offering hardware for pre-order/sale.

Personally I doubt that in the future I will buy any hardware that isn't verified to ship within 1 month of my order....hardware that actually exists and for a price where I can at least break even.
 

NO! The concept for any pre order of a product doesn't make sense! The companies will scam in this  economic community over  n over. If tou even preorder a week or a day you are hurting the buyers/investors market here for good.

I've ordered equipment from BFL three times now. Two of my orders have been delivered (after IIRC 4 month and 9 month delays) and a third hasn't yet. (6 months and counting)

Every one of those pre-orders was for an amount of money I could afford to lose. Why? Because pre-ordering means your not a customer, you're an investor. I did what due diligence I could on BFL, just as I would any other investment, and decided the possible return outweighed the risk. Two of my three orders have netted me a positive return, and as for the third, we'll see what happens.

Am I happy with BFL? Not really - I'd be happier if they met their advertised deadlines. But I myself work at a hardware-oriented startup - and have worked at other startups prior to my current job - and I know damn well that investments don't always work out.

Jeff Garzik had an interesting strategy: he figured at least one of the ASIC companies would deliver, and the return on investment would cover the losses on the ones that failed due to technical reasons or because they were frauds. So he took the money he could afford to invest in ASIC mining and split it evenly between all the companies claiming to make ASIC projects. His investment got him the first Avalon delivered, which by itself was enough of a positive return to cover his losses even if all the other companies turned out to be frauds; IIRC none of them failed to either ship a product, or refund his money in the end.

Of course whether or not what BFL is doing should be or is legal is another matter, but myself I generally favour that society let adults make their own choices.

fuggedit: You mean you're jealous because I had an opportunity to take a risk on an investment because I had some spare money lying around and you didn't? That's just life.

Nothing was stopping you from simply scaling down your investment - you could have ordered a BFL Single for $700 w/ shipping, or a single BFL Jalapeno for less than $200 with shipping. There are very few high-risk high-reward investments out there with such a low barrier to entry.