[MN]: Stock Market and Shareholders
- Jan 7, 2018
⌈ MODERN NATIONS ⌋ The Stock Market
- We're fairly unique in the sense we have a stock market, often changing in response to the game situation. This outlines the initial value of stock; how much someone has paid for the company and/or product, followed by it's current value which can be worth less or more. A number of factors determine the current value of stock including how healthy your accounts are, how you behave on the forums and whether you have multiple shareholders. When you purchase stock, your name will appear under the acquisitions column. This is what we call a Shareholder and these take precedence against a default owner, regardless of how little you purchase. Shareholders can purchase up to 100% stock in a company or product, making them the sole proprietor. One of two things will happen, the individual will own all the products that the company manufactures, including the ownership of it's subsidiaries or they will own the intellectual and property rights of a single product. When a player purchases stock to this manufacturer, they only have access to the remaining products and not to the product they already sold. This is a sure way of keeping an important product safe from others.
- You can only purchase stock from the default owner, which makes acquiring them difficult. You can contact them, but they can only sell the stock once they own it themselves. For those reasons, you could be paying three times as much as they must pay. They might want a higher percentage of profits or you may be fortunate to have someone who wants very little. You will not know the initial value of this company or product, so you'll find out how much extra you've paid when the details are input to the stock market. Once you have stock, you can do one of two things with it. Keep it or sell it. This is an excellent way of making an even larger amount of money, because the value of the company could rise the moment that stock is exchanged. For example:
This shareholder bought 51% of Alenia Aermacchi for $1,676,510,039.00, but his stock is now worth $4,064,716,516.55. This means, he can sell his stock to another player for an even greater value. He may decide he wants to only sell a portion of his stake, so he would need to determine what 1% is worth by dividing this figure with his total number of shares. Then he could sell 10%, 21% or even 36% to any prospective buyer. Doing this doesn't come risk-free. You're introducing a second shareholder. Each shareholder's stock would be worth different amounts depending on the percentage they own and what factors are in play and both of them will affect not only the other, but the current valuation of the stock. What does this mean? Well, if both shareholders are very wealthy, the worth of the stock will rise astronomically. That means even more profit if you decide to sell more stock later. However, if one shareholder gets into financial difficulty, the current value could decline and become less than what the company was initially sold for. This is what we describe as unprofitable. At this stage, the stock you own has become worthless. The more shareholders you introduce, the more risky this becomes for everyone. Below is an example of a company with two acquisitions:
In this scenario, having two shareholders is a good thing because the individual stock are both positive, which means the company worth has also rose. Here's an example of what would happen to this company if Sweden was struggling:
While Sweden's misfortune has not impacted the 97% that Nexus owns, the valuation of his individual stock is negative and this has significantly reduced the total value of the company; deducted over $10,000,000,000.00. However, there are a number of ways to secure yourself during this unfortunate event. Due to the damage being caused by this negative shareholder, the other shareholder with the majority stake can force them out of the company and his stake would return to them. But, this is not so simple when both of you have an equal share. The only advise we have is that you offer to buy-back these shares unless you have a third, even fourth shareholder. In these circumstances, if the remaining shareholders are all in favour of removing the individual, you can force them out the company and their stake would be evenly distributed, regardless of how large their stake is. This is a great example of three:
- We're going to use an example to explain how you purchase or sell shares using the United States as player A, Sweden as player B and Lockheed Martin:
1) Player B has contacted player A in-character to request 25% of Lockheed Martin. Player A does not have stock in Lockheed Martin yet.
2) Player A must submit a Support Ticket asking for the value of Lockheed Martin, so that he can determine how much 25% will be sold for. For this example, 25% is worth $1,000,000,000
3) Player A must transfer $1,000,000,000 to Modern Nations to make any purchase for Lockheed Martin official.
4) Player A will explain to player B that 25% of Lockheed Martin has an asking price of $1,740,000,000. This means Player A is receiving an extra $740,000,000 in profit.
5) Player B will transfer the money to player A in exchange for 25% Lockheed Martin. Player B will need to submit a Support Ticket to inform the Administrators.
6) The Administrators will add player B to the stock market.