14 May, 2009, Banner wrote in the 1st comment:
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I'm contemplating a stock system to go along with my corporation code, allowing players to buy shares in a corporation and/or buy the corporation out, assuming they own a majority. Frankly, however, I'm unsure of where to start, what exactly I want to do with it, or how I'd want to implement it into my corporations. Is there a codebase out there that has something similar to this that could be of inspiration?

Any help appreciated. Thank you.
14 May, 2009, tphegley wrote in the 2nd comment:
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In a few years you'll be coding a bailout plan…
14 May, 2009, Banner wrote in the 3rd comment:
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Lol, now there's an idea…. just kidding!
14 May, 2009, Zenn wrote in the 4th comment:
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A builder of mine made a functioning stock system with mobs, objects and progs. He's pretty brilliant :D

Wouldn't work with you, since you have your corporation system, though.
14 May, 2009, tphegley wrote in the 5th comment:
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My main concerns about owning a company would be that one person with all the money starts to buy out everything and then gets a monopoly on everything. How would you combat this?
14 May, 2009, Banner wrote in the 6th comment:
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Zenn said:
A builder of mine made a functioning stock system with mobs, objects and progs. He's pretty brilliant :D

Wouldn't work with you, since you have your corporation system, though.

I'm talking about code, and I fail to see how this helps me.


tphegley said:
My main concerns about owning a company would be that one person with all the money starts to buy out everything and then gets a monopoly on everything. How would you combat this?

My MUD has a rich economy, so its quite easy to have near one million, but in excess of five or six makes you middle to upper class. Stock price of a certain company would be based on that company's current financial situation which has many differentiating factors. To control or sucessfully buy out a corporation, you must own a majority of the stock. Generally speaking, the company's CEO and shareholders would own 50% of the stock, and the other 50% is sold to the public, so unless the company was doing poorly and had to sell some of their share of the stock to make up for financial loss, they wouldn't need to sell their stock, and it'd be otherwise impossible to buy out the company. Corporation funds would be deducted for maintaing ships and purchasing supplies, paying employees, upkeep on shops and districts they control, warehouse upkeep and stocking for their vendors and whatnot, so they would need a constant and steady income to keep their financial situation in check or they'd go under, needing to sell shares to pay for their loss, and thus opening themselves up to buyout.
14 May, 2009, David Haley wrote in the 7th comment:
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Are you trying to model a real-world type of economy/stock market, or something that suits your gameplay purposes? In the real world, it doesn't mean much to speak of "CEO and shareholders" owning 50% of the company – by definition, the shareholders own 100% of the stock. There's no guarantee at all that the CEO owns 50% or even anything remotely approaching that; the CEO is an appointed position and it's quite possible for the CEO to own none of the company's stock at all! The point here is basically to probe what exactly the goal is. The real stock market is a very different beast than what you have alluded to so far. Of course, the real stock market is not necessarily the best gameplay design out there for your purposes.
14 May, 2009, Banner wrote in the 8th comment:
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I don't want anything near as complicated as that, I speak merely of what I wish to accomplish. Basically, when a player starts his corporation, he will be given 50% of the shares, let's say that's 500 (of 1000), so 500 are available for the public to purchase. To buyout the corporation, they'd need to own 1 more share than any other player that holds shares in that corporation, which will never be possible, assuming the CEO never sells any of his shares.
14 May, 2009, David Haley wrote in the 9th comment:
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So a buyout would be possible if one player owns 11, but everybody else owns 10 or less?
14 May, 2009, Banner wrote in the 10th comment:
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David Haley said:
So a buyout would be possible if one player owns 11, but everybody else owns 10 or less?

Yes, but the starting shares of the smallest company wouldn't be that low.
14 May, 2009, David Haley wrote in the 11th comment:
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Well, I just meant that it seems funny for the definition of control to be owning more than any other person – that doesn't mean you have any kind of majority vote, it just means that you happen to have more than the second largest shareholder. You could have a company where 98 people own 1%, one owns 0.9%, and one owns 1.1% – but that last person hardly has any kind of majority stake in the company.
14 May, 2009, Banner wrote in the 12th comment:
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Well, imagine it was you had to own at least 51% of the shares, and there are only 1000 shares to make 100%. If 530 shares are scattered among about ten players, how is that one player going to acquire the 510 shares to take control since you can't buy them since they are stuck to players that already bought them? Hence the reason I was planning to do it this way. Unless of course you have ideas for me, which I am all ears.
14 May, 2009, Lyanic wrote in the 13th comment:
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Banner said:
Well, imagine it was you had to own at least 51% of the shares, and there are only 1000 shares to make 100%. If 530 shares are scattered among about ten players, how is that one player going to acquire the 510 shares to take control since you can't buy them since they are stuck to players that already bought them? Hence the reason I was planning to do it this way. Unless of course you have ideas for me, which I am all ears.

Supply and demand - as the number of available shares decreases, the purchase price for each additional share will increase sharply. This, in turn, provides incentive for the players holding onto shares to put them back on the market. After all, what is the goal of owning these shares if not to make money? This type of system would both reduce the likelihood of players hoarding shares, and increase the difficulty/cost of acquiring a monopoly. The only problem you might run into is the accumulation of shares by inactive players, in which case you could have them auto-forfeit after X number of days and return to the pool at current market price.
14 May, 2009, Dean wrote in the 14th comment:
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I think it might be prudent in keeping any stock system as simple as possible. How are you going to measure a corporation's performance and then in turn how it will effect the corporation's stock price. IMO, if all a person needs to buyout a corporation is one more share than anyone else, they quite possibly would change hands too frequently.
14 May, 2009, David Haley wrote in the 15th comment:
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I think there's something lost in translation. I'm not arguing with the idea that it's hard to get >50% of the shares. I'm saying that the definition of takeover given (one more share than the next largest shareholder) is kind of weird, and incidentally it's not the scenario you keep describing, which is in fact takeovers due to majority stakes. It seems likely to me at this point that you simply misspoke when you gave that definition, because it seems that you meant majority, not just one more than anybody else.

Anyhow, you need to give people a reason to want shares. Share prices are usually but not necessarily tied to a company's performance, or promise of future performance. In the real world, people invest in shares for all kinds of reasons. There are those who invest because they want to have a say in the company; there are those who invest because they believe the company will actually perform well and drive the price up; there are those who invest purely for technical reasons and don't really care about the company; and so forth. In this stock market of yours, what reason(s) do players have for buying stock? Are your prices going to be driven by performance alone? (which measure?) What about price pressures due to people buying and selling?

It seems clear that you're interested in corporations that have some activities and generate revenue streams for their owners. So far so good. Are your shares going to give out dividends to pay out this revenue? Why should I buy shares in this company and not that one? For that matter, why should I buy shares in any company?

So you already have corporations, right? Maybe it would be worth spending time on why those exist, what people do with them, and why people want them, in order to figure out why people would be interested in investing in other people's corporations.
14 May, 2009, Banner wrote in the 16th comment:
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Lyanic said:
Banner said:
Well, imagine it was you had to own at least 51% of the shares, and there are only 1000 shares to make 100%. If 530 shares are scattered among about ten players, how is that one player going to acquire the 510 shares to take control since you can't buy them since they are stuck to players that already bought them? Hence the reason I was planning to do it this way. Unless of course you have ideas for me, which I am all ears.

Supply and demand - as the number of available shares decreases, the purchase price for each additional share will increase sharply. This, in turn, provides incentive for the players holding onto shares to put them back on the market. After all, what is the goal of owning these shares if not to make money? This type of system would both reduce the likelihood of players hoarding shares, and increase the difficulty/cost of acquiring a monopoly. The only problem you might run into is the accumulation of shares by inactive players, in which case you could have them auto-forfeit after X number of days and return to the pool at current market price.

We did think of the inactive players holding onto shares already, and that will be implemented. I didn't think of shares becoming more valuable as they decrase, but that is an excellent idea and would definetly help to put certain shares back on the market. If a share is bought, the value of the remaining shares go up by 10.k, perhaps? All dependent on other factors of course, merely an example.


Dean said:
I think it might be prudent in keeping any stock system as simple as possible. How are you going to measure a corporation's performance and then in turn how it will effect the corporation's stock price. IMO, if all a person needs to buyout a corporation is one more share than anyone else, they quite possibly would change hands too frequently.

I do want to keep it simple, but interactive. Stock price would be merely based off of the current financial situation of the company, how much money they have in their corporate account. Perhaps funds/shares = stockprice? I'm not sure of the exact calculations as this part of the process is still in development, but I do not want corporations changing hands on a daily or hourly basis, so perhaps owning a majority (60% or more, you think?) would be better than 1 share more. Also, realize that a shares being bought from a corporation would remove them from the queue, so another player couldn't just buy more than the previous player.




David Haley said:
I think there's something lost in translation. I'm not arguing with the idea that it's hard to get >50% of the shares. I'm saying that the definition of takeover given (one more share than the next largest shareholder) is kind of weird, and incidentally it's not the scenario you keep describing, which is in fact takeovers due to majority stakes. It seems likely to me at this point that you simply misspoke when you gave that definition, because it seems that you meant majority, not just one more than anybody else.

I think given the opinions of most of us here that it would be best to use a majority instead of one more. I certainly wouldn't want a situation as Dean described, as that is both unrealistic and tiresome, but a majority of shares of the company would make you the shareholder.


David Haley said:
Anyhow, you need to give people a reason to want shares. Share prices are usually but not necessarily tied to a company's performance, or promise of future performance. In the real world, people invest in shares for all kinds of reasons. There are those who invest because they want to have a say in the company; there are those who invest because they believe the company will actually perform well and drive the price up; there are those who invest purely for technical reasons and don't really care about the company; and so forth. In this stock market of yours, what reason(s) do players have for buying stock? Are your prices going to be driven by performance alone? (which measure?) What about price pressures due to people buying and selling?

The only reasons I can think of people wanting shares in a company is for control purposes, buying/selling, and attempting to own the company. Beyond that, I don't see people wanting shares for the sole benefit of being interested in that company. Players want to be rich and they will want to buy shares that will be profitable in the future. Although I can see situations where a player starts a business, other players know this character ICly and believe he will be sucessful, so they buy up large sums of shares while the corporation is still newly created so they will become rich later. Investment would definitely be another reason.


David Haley said:
It seems clear that you're interested in corporations that have some activities and generate revenue streams for their owners. So far so good. Are your shares going to give out dividends to pay out this revenue? Why should I buy shares in this company and not that one? For that matter, why should I buy shares in any company?

Dividends would definitely be possible, but other than the reasons above, I don't know many more for players wanting to buy shares. Earning credits and becoming richer than the next guy is the biggest reason. I just want the system interactive and simple.


David Haley said:
So you already have corporations, right? Maybe it would be worth spending time on why those exist, what people do with them, and why people want them, in order to figure out why people would be interested in investing in other people's corporations.
Yes, we do have the corporations. Players open their own business, hire/fire employees, create a logo which will appear on their name, on products they manufacture with engineering, they can create subsidiary corporations and appoint CEOs of that, and so on and so forth. Corporations are standalone from clans so you may own/be in a business yet be in a clan as well. We do have player shop code, which I will tie into corporations for both profit and realism. Vendors attract players that are engineers and want to sell their wares to people who collect junk and want to make a killing with it. Corporations range from engineer-run businesses to private military corporations. I think the reason another CEO from CorpA would invest in CorpB would be to acquire a corporation as a subsidiary that is already established and has members based on starting his own that he will have to get up and off the ground and hire people for. Non-involved parties simply want to make credits.
14 May, 2009, David Haley wrote in the 17th comment:
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Banner said:
If a share is bought, the value of the remaining shares go up by 10.k, perhaps?

Well, normally the way it works is that the price follows the prices people are buying and selling at. If I see that a bunch of people are wanting to buy, I'll sell for higher than I used to, on the belief that you'll buy it anyway. And the reverse holds for price dropping. Of course, you could simplify this to a model where every transaction effects (sic) a fixed price movement, although then you have to determine which end of the transaction is the one moving the price. If the transaction is driven by a sale, the price would go down; if the transaction is driven by a purchase, the price goes up. (Remember that a transaction is both a purchase and a sale…)

Banner said:
Perhaps funds/shares = stockprice?

You can't really have fixed equations like this when you also have price movement due to transactions, unless you have some kind of reversion to mean model going on in the background.

Banner said:
but a majority of shares of the company would make you the shareholder.

I think this might be the reason for our earlier miscommunication: there's a vocabulary issue here. A shareholder is defined as somebody who simply owns at least one share. Owning a majority makes you the majority shareholder; all other actors are still shareholders.

Banner said:
Dividends would definitely be possible, but other than the reasons above, I don't know many more for players wanting to buy shares. Earning credits and becoming richer than the next guy is the biggest reason. I just want the system interactive and simple.

For this to work there needs to be a more concrete reason than simply "getting rich". What I mean by that is that if I buy shares thinking I'll "get rich" but there's no actual plan there, nothing will really happen. There needs to be a clearly defined way of getting rich. In the real world, you make money by shorting things whose price is falling and purchasing things whose price is rising (and later selling when the price is higher).
14 May, 2009, Kayle wrote in the 18th comment:
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Buy low! Sell High!

btw, Don't you work with stuff like this daily David?
14 May, 2009, David Haley wrote in the 19th comment:
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Kayle said:
btw, Don't you work with stuff like this daily David?

Yup… I'm not a trader so I'm not directly buying/selling securities but I do work in the financial industry.
14 May, 2009, Banner wrote in the 20th comment:
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Anyway, does anyone know of a MUD codebase to look at that may have something that can offer me some pointers on this?
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