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Subject: Merger when aquiring hotel has no more stock available rss

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Josh Bullock
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When an acquisition occurs and the acquiring hotel has no more stock available from the bank, is the 2-for-1 stock trade feature not an option? (In other words, are the shareholders of the acquired hotel forced to either 1) sell stock of the acquired hotel to the bank at the acquired hotel's stock price or 2) keep the stock of the now defunct hotel?)

Since no shares of the acquiring hotel are available, it would seem to make sense to allow shareholders of the acquired hotel to sell 2 shares of their stock to the bank for the value of 1 share of acquiring hotel. That would at least keep the trade-in feature somewhat intact.

Anybody know what the correct ruling is? The rulebook only addresses situations where you cannot BUY (not trade) stock if none is available.

Thanks.



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Tim
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Hi Josh,

The rules may not specifically mention anything about the trading 2 for 1 and if no stock is left (I don't have the rules in front of me), but when the 25 shares are gone, they are gone. You can't get anymore. Therefore, the 2 for 1 trade would not be an option (unless the person before you cashed in their shares first, thereby making some available). So, the two options that you mention (selling or keeping the stock) would be the only ones left.
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Jeff Michaud
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Tim is of course right... and it's part of the reason why the person who caused the merger to act first... they have first shot at trading in.... all part of the strategy.
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Steve Bachman
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Phytoman wrote:
Hi Josh,

The rules may not specifically mention anything about the trading 2 for 1 and if no stock is left (I don't have the rules in front of me), but when the 25 shares are gone, they are gone. You can't get anymore. Therefore, the 2 for 1 trade would not be an option (unless the person before you cashed in their shares first, thereby making some available). So, the two options that you mention (selling or keeping the stock) would be the only ones left.

There is no way to sell off stocks of the acquiring hotel during a merger - only the acquired one - so there is no way for them to become available during the merger.

The 2 for 1 option is just not an option in this type of merger. The OP suggestion to allow selling 2 shares of the acquired for the value of 1 share of the acquiring is the first I've heard of the suggestion or interpretation. I can see the reason for it, but I believe it undermines the intent of the game in that players are expected to invest in long term hotels (e.g. the acquiring hotels which often become safe) and short term hotels (e.g. the ones expected to be acquired for some merger payoffs).

Allowing someone who focused on short term strategies to get the benefits of the long term strategy reduces the decision-making tension in the game - one of its high points.
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Bill Eldard
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Tim, Jeff, and Steve have explained it very well. To allow otherwise changes the game.
 
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Josh Bullock
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Thanks to everyone who responded.

In the limited time I've played Acquire, it seems that the best strategy to make money is for the hotels you own to get acquired by a larger hotel. The game mechanics allow you to increase the value of your investment in the smaller hotel on the 2-for-1 trade (e.g. your two $300 shares become worth one $700 share after they are acquired). This is what makes Acquire such a good game.

However, if you can't trade your shares on the 2-for-1 basis because there aren't any shares of the acquiring hotel available, there really is no benefit to being acquired. Sure, you can sell your stock of the acquired hotel for the pre-acquisition price and generate some immediate cash, but you haven't made any money by being acquired. In this situation, only the shareholders of the acquiring hotel benefit from an acquisition as their hotel is now larger. Note that before the shares of the acquiring hotel are all sold, both the acquiring and acquired shareholders benefit from an acquisition. Effectively, if the shares of the acquiring hotel are all out, the rules/rewards change mid-game in an illogical manner.

I know Acquire is a simple board game, but extending the example to the real world, if I own a small hotel, why would I sell my small hotel to a larger hotel for the same price per share I'm already getting in the stock market (unless I had financial problems)? Usually, companies that are being acquired receive a premium from the buyer, as is the case in Acquire with the 2-for-1 trade before the stock runs out.

If there are no available shares of the acquiring hotel, it is fair to allow the shareholders of the acquired hotel to be able to sell 2 of their shares for the value of 1 share of the acquiring hotel based on the size of the acquiring hotel (after the acquisition). This allows everyone to still benefit from an acquisition, just like before all the stock of the acquiring hotel is sold. Shareholders of the acquiring hotel benefit as their shares are now worth more because the hotel grew, and the shareholders of the acquired hotel benefit from receiving a premium on their shares.

I wouldn't think tweaking the rules to allow for this would mess up the game at all, but I haven't tried it.

When you have 5 or 6 people playing more people you have playing, is is likely all the shares of one or more hotels will be bought well before the end of the game and this situation will arise frequently.

Any thoughts on this?
 
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Bill Eldard
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Joshbulll33 wrote:
Thanks to everyone who responded.

In the limited time I've played Acquire, it seems that the best strategy to make money is for the hotels you own to get acquired by a larger hotel. The game mechanics allow you to increase the value of your investment in the smaller hotel on the 2-for-1 trade (e.g. your two $300 shares become worth one $700 share after they are acquired). This is what makes Acquire such a good game.

However, if you can't trade your shares on the 2-for-1 basis because there aren't any shares of the acquiring hotel available, there really is no benefit to being acquired. . .


I strongly disagree, Josh.

The key to success in Acquire is striking a balance between long-term investment and cash generation through sales of shares.

While acquiring shares in the larger hotel is a good way to grow cash, it can also be trap in that once it reaches 11 tiles (unable to merge), it doesn't pay off until game end.

Frequently merging generates cash so that you can buy shares in a variety of hotels.

The art is in determining the optimum mix of 2:1 share trade, cashing in, and holding on to the shares, and all of that is game situational.

Joshbulll33 wrote:
. . . Sure, you can sell your stock of the acquired hotel for the pre-acquisition price and generate some immediate cash, but you haven't made any money by being acquired.


That statement seems self-contradictory. If you bought 3 shares at $300 each ($900), and the company has grown so that they sell for $500 each ($1500), you've made $600 whether you sell during the merger or the hotel remaind independent til game end. The big difference is that by merging, you have cash on hand for reinvesting.

And don't forget the big bonuses to the majority and minority shareholders when the smaller hotel is merged. That's a powerful incentive to merge.

Before merging into a larger hotel, always expand a hotel in which you have majority or minority share holdings. By growing the hotel, you gain whether you exchange shares 2:1, or sell.

Joshbulll33 wrote:
In this situation, only the shareholders of the acquiring hotel benefit from an acquisition as their hotel is now larger. Note that before the shares of the acquiring hotel are all sold, both the acquiring and acquired shareholders benefit from an acquisition. Effectively, if the shares of the acquiring hotel are all out, the rules/rewards change mid-game in an illogical manner.


And this provides strong impetus to avoid a merger. If the shareholders of the larger hotel stand to gain more than the shareholders of the smaller hotel, the latter shareholders must ry to prevent a merger if possible.

Joshbulll33 wrote:
I know Acquire is a simple board game, but extending the example to the real world, if I own a small hotel, why would I sell my small hotel to a larger hotel for the same price per share I'm already getting in the stock market (unless I had financial problems)?


In the real world, there are all kinds of reasons why the smaller hotel might merge, including hostile takeovers (already similuated in the game) --- far too complex for this level of abstract strategy game.

Remember, this isn't a simulation of the business world; it's a strategy game with a loose theme applied.

Joshbulll33 wrote:
. . . If there are no available shares of the acquiring hotel, it is fair to allow the shareholders of the acquired hotel to be able to sell 2 of their shares for the value of 1 share of the acquiring hotel based on the size of the acquiring hotel (after the acquisition). This allows everyone to still benefit from an acquisition, just like before all the stock of the acquiring hotel is sold. Shareholders of the acquiring hotel benefit as their shares are now worth more because the hotel grew, and the shareholders of the acquired hotel benefit from receiving a premium on their shares. I wouldn't think tweaking the rules to allow for this would mess up the game at all, but I haven't tried it.


What you want is a kindler-gentler Acquire, and you're certainly free to play that way if you want.

I don't find the rules to be unfair, and I've never played with anyone who felt so. The official rules do provide the tension in the game.

Joshbulll33 wrote:
. . . When you have 5 or 6 people playing more people you have playing, is is likely all the shares of one or more hotels will be bought well before the end of the game and this situation will arise frequently.


There's that tension, Josh.
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Jeff Michaud
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Joshbulll33 wrote:
I wouldn't think tweaking the rules to allow for this would mess up the game at all, but I haven't tried it.....

Any thoughts on this?

You can give it a try (and please report back to this thread so those of us subscribed will get notified of the new reply), but as we've already said, you take away a big part of the strategy, and there is more than one way to win....

Remember that earlier in the game you want to cash out at least partially to have capital to have money to buy shares in other companies. And having shares in the biggest company at the end of the game gains you even bigger dividends.

Game has been around 40+ years, if the game was broken as you think it is I think someone would have spoke up before now
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Tim
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Bill explained some of the strategies very well. The key to a victory is to have a good cash flow early on. That means you want your little chains (only the ones where you have first or second majority) to get gobbled up so that you will have cash to spend and hopefully your opponents will not. After a merger happens where a hotel that you own shares in gets gobbled up, it may be to your benefit to keep those shares (or at least some of them) in hopes that it gets re-established again. Or (especially if it is late in the game) if you are going for a majority of the larger chain, then turn them in 2 for 1, especially if the stock you are trading them in for is worth more than twice their value. If not, you may just want to sell them and get the cash (especially if it is early and two heavyweights merge and you are not interested in a majority at that time). There are lots of strategies and, of course, everyone has a slightly different one which often throws a monkey wrench into yours. That's why I love this game and have it as my only rated 10. I even enjoy the luck aspect of drawing the "right" tile (which does play heavily into the game). However, I have always said that even with bad tiles, a good player will at least make the game competitive.
 
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Josh Bullock
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Bill,

Thanks for your response. I really do appreciate it, and I enjoy the debate. I do think Acquire is a great game and don't think it's "broken" as someone else implied I said.

I may be beating a dead horse on this, but when you cannot obtain a 2-for-1 trade, you do not gain anything if you have to sell the stock of the acquired hotel for the pre-acquisition price other than a little cash. This is not self-contradictory. The cash you receive from the shareholder bonus is enough to buy 2-3 shares of any size hotel in the game, so additional cash flow generated by selling shares back to the bank is really not a benefit.

In the example you gave, you buy 3 shares of a hotel for $300 each, and when it is acquired it has grown so that each share is now worth $500. You made $200 per share because that hotel grew, not because it's being acquired. If you cannot trade 2-for-1 for the acquiring hotel's shares, you have not gained anything by being acquired. Those shares are worth $500 each whether you had to sell or not (unless you decide to hold the shares of a defunct hotel in which case they go to $0). There is a good chance they are worth more than $500 if you can trade them in 2-for-1 for shares of the larger hotel. If they are worth more post-acquisition, the best strategy is to trade them even if you're low on cash. The object of the game is to have the highest net worth, not generate the most cash flow.

I realize Acquire is not a true simulation of the actual business world or real estate world, but even in a hostile takeover (or any business acquisition), a majority of shareholders have to agree to a sale. They're not going to do that unless they get some economic benefit.

One of the great things about Acquire is that it actually does a good job of paralleling the real world by making it beneficial to both acquire and be acquired. That changes when the acquiring hotel runs out of stock. I don't want a "kinder, gentler Acquire" - I want a game where the logic doesn't change simply because we ran out of stock cards (probably due more to production costs than game design). That seems like a poor reason for the rules to change mid-game. It doesn't ruin the game, but it does detract from the simulation aspect of the game.

Determining when to change your strategy here isn't an art - as soon as the stock of a hotel is out, you simply want to avoid having a hotel you own being acquired by that hotel. Succeeding at this then comes down to luck of tile drawing. As long as hotels have stock available, you want to be acquired and you want to trade 2-for-1. Obviously, you want to be the #1 or #2 shareholder in as many hotels as possible.

Developing a solid overall strategy in Acquire also requires little "art". In fact it's very simple. Early in the game, you want to found hotels and have them acquired, along with buying shares in other hotels that can be acquired by other hotels. Shareholder bonuses are what generate new cash flow which lets you buy shares in other hotels. You earn your best return on your investment by trading the shares of your acquired hotel for shares of the acquiring hotel. Later in the game, you want to grow the hotels where you're either the 1st or 2nd shareholder either by adding single tiles or through acquisition. The only time holding stock in a defunct hotel is a viable strategy is early in the game while there are still plenty of open areas on the board. Later in the game, it is a pure gamble and the other players will do their best to make sure you don't re-establish your hotel.

Follow this strategy, and you'll do well, although your successs will still be affected by luck of the draw.
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Bob Henry
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Well, I've played Acquire for many years (more than I'd like to admit).
Much of your thinking and strategy are on the mark.

However, I think you'll change your mind about your following statement after you've played it more times and with different numbers of players.

Joshbulll33 wrote:
I want a game where the logic doesn't change simply because we ran out of stock cards (probably due more to production costs than game design). That seems like a poor reason for the rules to change mid-game. It doesn't ruin the game, but it does detract from the simulation aspect of the game.


It turns out that having a total of 25 shares and a limit of 3 buys per round (and the founder's share) sets up certain competitive buying patterns that force player choices about whether to invest in trying to get #1 or #2 in a particular chain. It simulates the limited opportunities for major investors to get in on an investment or a merger deal.

Given the cash flows and length of the game, I suspect some perceptive playtesting determined that 25 was the right number, not some arbitrary production decision. In any event that number leads to a balance between players being able to control some situations but not always being able to do what they want.

In my (personal) view, the luck in Acquire is meant to put a tension in whether your investments will pay off and your plan work out. It's simulating the uncertainties of the investment world.

IMHO, the best players win more than their "fair share" of games because they master the critical cash management aspect to fund their investments, protect them and seize opportunities.

Have fun digging further into this "old chestnut"




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Jeff Michaud
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time to unsubscribe from this one bye!
 
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Dan Nunuyerbiznez
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Joshbulll33 wrote:
Developing a solid overall strategy in Acquire also requires little "art". In fact it's very simple. Early in the game, you want to found hotels and have them acquired, along with buying shares in other hotels that can be acquired by other hotels. Shareholder bonuses are what generate new cash flow which lets you buy shares in other hotels. You earn your best return on your investment by trading the shares of your acquired hotel for shares of the acquiring hotel. Later in the game, you want to grow the hotels where you're either the 1st or 2nd shareholder either by adding single tiles or through acquisition. The only time holding stock in a defunct hotel is a viable strategy is early in the game while there are still plenty of open areas on the board. Later in the game, it is a pure gamble and the other players will do their best to make sure you don't re-establish your hotel.

Follow this strategy, and you'll do well, although your success will still be affected by luck of the draw.


Most of your points are handled elsewhere.

The above statement indicates that you are not playing Acquire to its fullest potential. There are several more layers of tactics and strategy than you show above (there is certainly quite an "art" to adapting your strategy and tactics to current conditions). I'll just say that the limitation of hotel stock is an integral part of the game and, as in many games, euros included, produces a staging of the game, and understanding the current stage is critical to doing well in this game. I mean, why does a hotel chain become "safe," by your same logic? Because it is in the rules!
 
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Joshbulll33 wrote:
I want a game where the logic doesn't change simply because we ran out of stock cards (probably due more to production costs than game design). That seems like a poor reason for the rules to change mid-game. It doesn't ruin the game, but it does detract from the simulation aspect of the game.


I'll throw another hat into the ring that the 25 card limit was 100% a game play decision rather than to limit production costs. These game designers, especially one of the greats in Sid Sackson, know what they're doing!

The 25 card limit makes for some really tough decisions.

Do I take those 2:1 trades now while they're available, or sell my shares for cash in order to reinvest in new stock, risking that those shares for larger hotels will be gone before my next opportunity? As has been said, the balance between having capital to reinvest while also looking toward the end of game payouts is a critical decision that the stock limit of 25 creates.

Toward the later stages of the game, maybe things didn't go my way, and I don't have much stock in the remaining companies that are likely to merge into the largest companies. I might decide to invest directly in the expensive shares before merges happen that allow people to gobble them up with 2:1 shares in hopes of still getting in on those fat end of game bonuses.

The whole game is about timing, and the 25 share limit really puts some urgency and tension to that timing. If you never had to be worried about stock running out, the game would lose a lot of the greatness it has going for it.
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Frank Feldmann SoFrankly
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Joshbulll33 wrote:


I want a game where the logic doesn't change simply because we ran out of stock cards (probably due more to production costs than game design).



I doubt it has to do with production costs. Earlier incarnations had stock "cards" that were little more than paper, but there was still only 25 of them.

I am not much of an investor, but don't all companies have a finite number of shares? If they don't, if shares are infinite in number, the shares have no value.
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Tomello Visello
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Joshbulll33 wrote:
I know Acquire is a simple board game, but extending the example to the real world, if I own a small hotel, ...
Back up just a little bit and think about another aspect. In the real world you aren't limited to purchaseing just 3 shares at a time, either. The confinement of the rules is how this game came to be greatly appreciated.

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