Stocks for Player Companies

Guest · Post by **Guest** » 26.03.2008, 04:47

I really thought this through and I think it may be a good idea. I will add more information on bold words/phrases at the (or near the) end. Please post your questions here and I will add them to the FAQ near the end of the details on my idea. I know there is a large chance this is a big waste of time but I thought (little but) hard about how this will work.

Stocks for Player Companies

Part 1: Why should this be added?

Section 1-1: How will this help the game?

The idea about owning stocks for companies belonging to other players is to help companies grow, increase interaction and direct communication between players, and this can also be a temporary solution to loaning money to other companies.

Section 1-2: Will this help make the game more like real life?

This may also be like investing into player companies since there are chances to make money from investments but also risks of losing money as well (just like in real life when investing or buying stocks).

Part 2: How will the Stocks will work?

Section 2-1: How much will each stock be worth?

The value of each stock will be 1% of the company's original value. The owner of the company will automatically start off with 100 stocks of his/her company which is 100% of the company's original value. When stocks are purchased, the money from selling the stocks will be added to the player's "cash" as normal. When an investing company sells back the stock, the total value of the stock sold back is automatically taken from the company that the stock is for and sent to the investing company immediately without confirmation from the company the stock is for which makes it possible for the company to have negative cash. The owner will always have 100 stocks so the stocks will be created as they are purchased from the company and destroyed as they are sold back to the company.

Section 2-2: How will stocks be exchanged between companies?

The owner is able to sell stocks of his company to other players (by contract). The owner will also be able to present his company to the public in the stock market where other players can freely see the owner's company and send the owner (reversed) contracts where the owner will receive the contract as normal with the amount of stocks the company wants and the owner can press "accept" (automatically sell the amount of stocks to the company) or "decline" (the offer is turned down and nothing is changed). Stocks can only be sold to and bought from the company that the stock is for. NOTE: The owner will always have 100 stocks so the stocks will be created as they are purchased from the company and destroyed as they are sold back to the company.

Part 3: How will this change the current game?

Section 3-1: How will the total value of stocks be added as part of the company?

The total value of owned stocks can be added as another amount of value that can be added to the company's cash and fixed assets for total value. There can be a "Purchased Stock" value and also "Sold Stock" value under "Fixed Assets" value on the side of each page and also in the showcase and user lookup which also shows how many stocks that are sold to other companies (includes the 100 stocks the owner starts out with).

Section 3-2: How will this change the stats (Top Lists)?

The top lists for "Cash" and "Fixed Assets" will surely be affected by stocks. I think that the "Cash" and "Fixed Assets" will be the company's original value (100 stocks worth of "Cash" and "Fixed Assets"). This will also put in new Top Lists for companies that the big companies can compete for Total Stock Value, Complete Company Value, and also Original Company Value.

Section 3-3: What happens if a company with stocks is reset, deleted, or banned?

Since the only way to destroy stocks is to sell the stocks back to the company, a company that owns stocks for other companies will automatically sell the stocks back for their current value before being reset, deleted, or banned. If the company sold stocks to other companies,
the stocks will automatically be bought back at its current value before being reset, deleted, or banned. Because selling stocks back to the company it is for is an immediate transaction without confirmation, the reset, deletion, and banning will still be effective immediately. Since the company will have all (or most/more) of the money invested returned, cheaters will be unable to keep the money obtained via selling stocks.

Part 4: Frequently Asked Questions (None, will add as questions appear.)

Section 4-1: What happens if a company has its stocks sold back and the company doesn't have enough money?

The company selling back the stocks will get the full price and the company that the stocks are for will go into negative cash. The negative amount of cash is already in the game and the money will need to be gotten to return to positive from methods such as selling products to other players, selling products in stores, getting a loan from the bank, selling buildings, or selling stocks to regain the missing cash.

Part 5: What do those bold words/phrases mean?

Section 5-1: Original Company Value

How much the company will be worth if no stocks for the company is sold. Found by dividing the Company's Complete Value by amount of stocks and multiplying by 100.

Section 5-2: Complete Company Value

How much the company is currently worth right now. Includes money obtained by selling the company's stocks.

Section 5-3: Reverse Contracts

Can also be called sale contracts which gives the receiver permission to sell to the sender the specified amount of a certain product without needing to wait for the receiver to send a contract to the sender. Since permission is already given by this type of contract, the transaction is immediately completed without waiting for the sender's confirmation. Reverse contracts is not an existing feature of Kapilands but my current details does not make this feature required for stocks for player companies.

Section 5-4: Stock Market

This can replace or be added to the current stock market found in the "Credits" menu found in the office (manager rank or higher required to gain access).

The End

Feel free to start posting your comments and questions. If you give a suggestion I like, I will fit it into the details and give proper credit.

Guest · Post by **Guest** » 26.03.2008, 05:55

I have posted this suggestion before
and I again stress that another economics simulation game have this feature too

Edit by Zbombe: Please do not advertise other games.
( reply to mods deletion.... Sorry, I understand now)

I GIVE FULL SUPPORT TO THIS SUGGESTION

Guest · Post by **Guest** » 26.03.2008, 23:24

Dont have time to read atm, but i will when i get back from church, one question though the stocks are bought lets say for 500 each and the company A bought 50 of them, so 25000 now that is added into the company B's cash, what happens when company A sells them back and company B doesnt have the cash?

Guest · Post by **Guest** » 27.03.2008, 01:30

farmboy wrote:Dont have time to read atm, but i will when i get back from church, one question though the stocks are bought lets say for 500 each and the company A bought 50 of them, so 25000 now that is added into the company B's cash, what happens when company A sells them back and company B doesnt have the cash?

Then make it so they must not have lower than what is invested in them.

Guest · Post by **Guest** » 27.03.2008, 01:50

The cash balance will go into negative. Negative cash is already possible in the game (trust me, it happened to me on my first time playing).

Guest · Post by **Guest** » 27.03.2008, 02:19

which will make the company go broke since you cant set production or sell to the market or send a contract that is out of your zone

Guest · Post by **Guest** » 27.03.2008, 02:19

Why should the company that issues the shares have to buy them back whenever the shareholder chooses? After the IPO, let the shareholders sell the shares on the market, just like anything else. The price of shares is determined by the market.

What about dividends? That's a major motivation for owning stock in RL.

What about control of the company? I suppose takeovers would be too complicated. Maybe say that you have to hold a majority (50% + 1) of the shares.

I think that 100 shares would be too few. Maybe 1,000 or 10,000.

I think that bonds would be a better fit for the game. A company issues bonds that pay X% for Y time period. When the bonds mature, the company pays back the face value of the bonds. The bonds could be traded on the market. That would be a great thing for new companies that want to expand but don't have good cash flow yet. Limit the number of bonds to some % of the company's net worth.

Guest · Post by **Guest** » 27.03.2008, 04:09

Stocks can not be bought back unless the company is going to be reset, deleted, or banned.

About the takeover, if you "own" 99% of a company through stocks, then 99% of the company current value belong to you. You can give suggestions to that company you own a large amount of stocks for but if you start to dislike what is going on inside the company, you can sell back all the stocks for that company. You get the total value of the stocks and the company you sold the stocks back to will become broke so you can threaten bankruptcy for that company.

Selling the stocks of other companies to other companies on a market can cause a lot of problems. I think stocks are supposed to be sold to people you trust and that is why the company needs to confirm if he/she will sell the stock to that person or not. Trust plays a big role when your parts of your company are in the hands of other people.

Let's say that Company A is selling his stocks to Company B. Company C knows Company A in real life and got very mad at Company A so he wants revenge. Company C convinces Company B to sell him Company A's stocks. Company C is now in possession of Company A's stocks and then sells it all back and now Company A has financial problems and a war has begun.

Guest · Post by **Guest** » 27.03.2008, 04:18

The company should have the right if they want to be on the stock market or not.

Guest · Post by **Guest** » 27.03.2008, 07:37

I agree so
and some copanies dont have enough money to be enlisted at ti
So, I think only companies ranked above manager can have this feature

Guest · Post by **Guest** » 27.03.2008, 18:06

Limiting it to Manager level and above would be cutting out the people who need cash the most. New businesses need cash, and established businesses typically have lots of cash to spare.

I think that a mechanism for loans

Guest · Post by **Guest** » 27.03.2008, 21:24

Interesting and well-presented. I'll give it a good read and post an exhaustive reply later.

FYI, Gevron, if you're thinking of the game I think you mean, it's not a very realistic representation at all. And it only works there because the entire system there is less realistic than here.

Guest · Post by **Guest** » 27.03.2008, 22:48

I'd like to clarify a few things about your proposal:

You're saying that stock value is rigidly based on book value, correct? Players can't negotiate more based on growth expectations or the nature of the business? Neither does it shift with supply & demand?

This "company value" completely ignores inventory, correct?

Players buy stock from the company (as opposed to secondary market) only with the company owner's consent. But they sell it back at any time instantly, correct?

How do you account for a company's value changing while this "reverse contract" is on the table?

Does the company have any way to force redemptions?

There are no dividends or anything like that, correct?

There's no controlling interest, no shareholders vote, correct?

Stock owned in other companies: counts as Cash, Fixed Assets, or none of the above?
Stock credits sold by your company: counts case negative cash, negative fixed assets, or none of the above?

Guest · Post by **Guest** » 28.03.2008, 03:30

Knolls wrote:I'd like to clarify a few things about your proposal:

You're saying that stock value is rigidly based on book value, correct? Players can't negotiate more based on growth expectations or the nature of the business? Neither does it shift with supply & demand?

This "company value" completely ignores inventory, correct?

Players buy stock from the company (as opposed to secondary market) only with the company owner's consent. But they sell it back at any time instantly, correct?

How do you account for a company's value changing while this "reverse contract" is on the table?

Does the company have any way to force redemptions?

There are no dividends or anything like that, correct?

There's no controlling interest, no shareholders vote, correct?

Stock owned in other companies: counts as Cash, Fixed Assets, or none of the above?
Stock credits sold by your company: counts case negative cash, negative fixed assets, or none of the above?

The stock value is completely based by the company's data or value. Players can negotiate with the company but like many deals made in the game, there is no guarantee that the company will listen. As far as supply and demand go for a company's stocks, there is no market so the company is in charge of the supply of stocks.

The company value completely ignores inventory value since it is not currently implemented but will be if it does get added to Kapilands.

The company consent is required to purchase the stocks but consent is not required to sell the stocks back to the company.

About the "reverse contract", I am thinking about removing it since "reverse contracts" would be a completely different suggestion. As far as the "reverse contract" having changing values, I am not exactly sure since I never thought of that. I am going to change the "reverse contracts" to messages with a link that automatically send a contract back to the sender with the details (much like the random quests where the products are automatically sent).

For redemptions, if you mean the owner reclaiming all stocks he sold, then maybe yes. If you mean the company redeeming money for the stocks he has, then it will same as selling the stocks back.

There will be no dividends since any profits will be provided via stock value.

There will be no interest. For the shareholders' vote, there will be no in game tools to track the votes for shareholders and the company and about sending in your decision via forums, IGM, or etc., there is no guarantee that the company will listen or use the suggestions. But of course, refusing to use some of the shareholder's ideas may cause them to sell back the stocks would will most likely pose a great threat to the company's finances and so listening is a good idea unless you are prepared for the shareholders to leave.

None of the above. The stock values should have there own stat that is similar to Cash and Fixed Assets.

The total value of stocks will not be removed from either cash nor fixed assets and that is why that the "original company value" is in place so that amount gained by stock will not count (not completely accurate but as close as I could think of).

Those are very good questions Knolls so I will add them to the frequently asked questions but I don't have time at the moment.

Guest · Post by **Guest** » 28.03.2008, 04:02

I do support this idea becuase it adds more fun to the game
also makes it more realistic