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1830: Railways & Robber Barons» Forums » Rules

Subject: When you buy the B&O private company... rss

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Andre Oliveira
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... you immediately get the CEO share of the B&O public company.

QUESTION: Do you put the $220 in the company's coffers (like you normally would when buying a CEO share during the game)?
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1830 companies float once 60% of the company has been removed from the IPO.

So, the answer is NO.

When the 6th 10% share of B&O is purchased then B&O will float and get 10x the PAR value set by the person that won the B&O private.
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Pete Goch
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1830 is a full cap game. You don't put any money on the charter until the company has been floated at 60% at which point you put 10x the par value onto the charter.
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aro246 wrote:
... you immediately get the CEO share of the B&O public company.

QUESTION: Do you put the $220 in the company's coffers (like you normally would when buying a CEO share during the game)?


THIS doesn't happen either.
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Forrest & Ryan Driskel
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aro246 wrote:
QUESTION: Do you put the $220 in the company's coffers (like you normally would when buying a CEO share during the game)?


No. Actually, your "normally" is also wrong. 1830 is full capitalization. No money goes into a treasury until 6 shares have been purchased from that company's IPO, at which time 10x par price is placed in the treasury.
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Andre Oliveira
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WOW! I wasn't playing like that at all...

I was putting the money in the company's coffers as shares were being sold.
But the company could only start using the money when it reached 60% of shares sold.

The effect ended up being the same, except for the fact that, in my wrong interpretation, the companies started operating with only 60% of the IPO money.

Let me ask you a follow-up question then:

If you put 10 x IPO price in the company's coffers when it sells 6 shares, what happens when you sell the remaining 4 shares?



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Burster of Bubbles, Destroyer of Dreams.
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aro246 wrote:
If you put 10 x IPO price in the company's coffers when it sells 6 shares, what happens when you sell the remaining 4 shares?





Nothing. There is one event putting 100% share money from the bank into the company treasury.

That is why 1830 and its like are called "full-capitalization" (full-cap) 18xx games.
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Dave K
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aro246 wrote:

Let me ask you a follow-up question then:

If you put 10 x IPO price in the company's coffers when it sells 6 shares, what happens when you sell the remaining 4 shares?


Nothing happens to the company's money when the remaining shares sell (or if they don't sell). The company receives all of its start money when it floats and gets the 10x share price.
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Travis Dean
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aro246 wrote:
Let me ask you a follow-up question then:

If you put 10 x IPO price in the company's coffers when it sells 6 shares, what happens when you sell the remaining 4 shares?


Then the company will now be sold out.

In 1830, when you buy a share from IPO or from the bank, the money goes to the bank.

When a company floats, it receives 10x IPO price in coffers.

No buying or selling of shares will give the company more money in it's treasury.

Being sold out (no shares in IPO or bank pool) will cause the share price to move up one vertically on the stock chart at the end of the Stock Round, but that is unrelated to you're wondering if they'll get more treasury money.
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Andre Oliveira
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Got it.

But are the remaining 4 shares considered to be...

ALT 1) ..."in the open market"? As if they had been bought at the IPO by non-player investors? And therefore subject to floating stock prices;

OR

ALT 2) ... still available for the IPO price for the players who want to get them in the future?
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Travis Dean
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aro246 wrote:
ALT 2) ... still available for the IPO price for the players who want to get them in the future?


2

They haven't been purchased yet, so they remain in the IPO. Only shares that have been sold end up in the bank pool.
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J C Lawrence
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They are still in the IPO and are available at par, which may be a different price than CMV.
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Andre Oliveira
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Got it. The rule is clear now.

But pretty weird if you consider what would happen in a real IPO. If you only sold 60% of the shares in the IPO, you only get 60% of the money.
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J C Lawrence
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Assuming that modern market efficiencies and rationality apply is not safe. Remember that this is before limited liability corporations (they came about in 1860) and way before market regulation. There's no SEC or anything like the idea of an SEC. As a result, as an individual and even minor investor in a company, you were personally liable for the company's debts. And this is back in the period when all the securities on the New York Stock Exchange were listed with room to spare on one side of one sheet of paper which was then leisurely gone over, in order, once in the morning and then maybe twice again in the afternoon (depending on how drunk they were).

And, contingency funding was also pretty common at the time, especially with the Dutch investors: Sure, I'll give you money as long as you can show that you raised $XXX from other sources. Then again, the railways of the American East were primarily financed by the Dutch...
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Andre Oliveira
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WOW again! Thanks for an excellent railroad history lesson.
The contingency funding explanation makes all the sense.
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Burster of Bubbles, Destroyer of Dreams.
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clearclaw wrote:
There's no SEC or anything like the idea of an SEC.


More to the point, the egregious behavior of the railroad barons was a large part of what inspired the creation of the SEC.

Remember, in 18xx you are trying to enrich yourself by engaging in behavior that is felonious by today's standards.
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J C Lawrence
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Each generation has carefully ensured that subsequent generations were not able to exploit the system in the ways that they did.
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Mark J
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Morganza wrote:

Remember, in 18xx you are trying to enrich yourself by engaging in behavior that is felonious by today's standards.


Interesting. What might the felonious behavior be? Insider trading?
 
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TheOneTrueZeke wrote:
1830 is a full cap game. You don't put any money on the charter until the company has been floated at 60% at which point you put 10x the par value onto the charter.
Actually, that's not quite right, either. Full cap 18xx games can be divided four ways on the point at which newly-floated companies get their initial capital--immediately on floating, at the start of the next operating round, at the start of the company's first operating turn, or the rules don't say. (The last is surprisingly common.) The Avalon Hill rules specify the second (at the start of the operating round); the Mayfair rules may well be different. The only difference is that the earlier you give the money to the company, the more likely it is that the bank will break while the game is still some way off its natural end. In practice this only applies in the "short game" where you don't use the Diesels and the bank is reduced to $4500.
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Mike Hoyt

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The key, which you all know, but nobody has said is

"You" don't give any money to the newly floated corporation, the bank does

So "you", the players together, are floating at 60% and the bank is then giving the corporation 100%, which gets more money in the game
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Steven Steck
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DiploGuy wrote:
Morganza wrote:

Remember, in 18xx you are trying to enrich yourself by engaging in behavior that is felonious by today's standards.


Interesting. What might the felonious behavior be? Insider trading?

Among other things, such as extremely creative accounting, such as selling assets from one company to another for a price that is nowhere near the market value of those assets (i.e. selling a train for $1)
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Dan The Man
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aro246 wrote:
Got it. The rule is clear now.

But pretty weird if you consider what would happen in a real IPO. If you only sold 60% of the shares in the IPO, you only get 60% of the money.


Well, you do sell out at the IPO, but only the big boys are represented in the game (the smaller investors are "The Bank").
 
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Steve Burt
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Floating a company which never builds and track runs any trains and just gets asset stripped into another company and dumped on an unwise investor.
Deliberately driving down the stock price of rival companies.
Using a company running in the brown zone as a cash generator for your premium compnay.

All that sort of stuff is perfectly standard game play, but probably illegal in real life.
 
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