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1830: Railways & Robber Barons» Forums » Rules

Subject: Can you sell a certificate in a company that has not floated? rss

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Caleb Wynn
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Title of the topic says it all.

I suppose if you can you sell at the PAR value?
 
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As long as a Corporation has a Par Value set for it (and it is not the First Stock Round), then you can sell a Certificate in a Corporation that has not yet floated.
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Kevin Nesbitt
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Except for the President's Certificate though, correct?
 
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Sidewynnder wrote:
I suppose if you can you sell at the PAR value?

Also you'd sell at the current market value, not necessarily at par.
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otrex wrote:
Except for the President's Certificate though, correct?

You cannot sell the President's Certificate (in whole or partly) unless another player holds two shares and can take possession of it. You cannot sell if the Bank Pool already holds 50% of the stock.
 
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jsnell wrote:
Sidewynnder wrote:
I suppose if you can you sell at the PAR value?

Also you'd sell at the current market value, not necessarily at par.


But if it hasn't floated, then you have to sell at PAR value, no?
 
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Sidewynnder wrote:
jsnell wrote:
Sidewynnder wrote:
I suppose if you can you sell at the PAR value?

Also you'd sell at the current market value, not necessarily at par.


But if it hasn't floated, then you have to sell at PAR value, no?

This is true UNLESS somebody else has already sold a share at par value and caused the price to drop from par.
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You sell it at Market Value. Which will be Par value unless someone else has sold a share already. Each share sold drops market value by one space.

This is somewhat rare as it doesn't matter if the shares are held by players or are in the pool -- once the Initial Offering is down to 4 shares (meaning 6 shares have been bought at one point or another), the company floats!

When you help someone float a company and retain the presidency, you're giving them access to the company's capital for less that they ordinarily would need to spend (60%). So they're free to spend their other money on more profitable ventures.

But other than in the first SR, you can sell any share you hold.

 
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J C Lawrence
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Bearcat89 wrote:
You cannot sell if the Bank Pool already holds 50% of the stock.


False. The limit is not 50%. The limit is no more than 5 certificates of any single company in the Open Market. This makes a difference with variants with companies with multiple 20% shares.
 
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Sidewynnder wrote:
But if it hasn't floated, then you have to sell at PAR value, no?


All share sales, without exception, are at the current market price. Share purchases are at par if bought from the IPO, and market price if bought from the Open Market.
 
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>False. The limit is not 50%. The limit is no more than 5 certificates of any single company in the Open Market. This makes a difference with variants with companies with multiple 20% shares.


That is a rule change. The AH rules say 50%.and this is not listed in the new Mayfair rules in the 1830 classic section.
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joscha wrote:
>False. The limit is not 50%. The limit is no more than 5 certificates of any single company in the Open Market. This makes a difference with variants with companies with multiple 20% shares.


That is a rule change. The AH rules say 50%.and this is not listed in the new Mayfair rules in the 1830 classic section.


My understanding is also 50% of the shares, not certificates. Except in some games/variants, each company has ten shares which means a limit of five shares can be in the open market - which in most cases also means five certificates.

In most games then the distinction is moot (remembering that a President's certificate can never end up in the open market). In 1856, where a CGR certificate can be worth 5%, the open market cap of 50% of shares is still specified. It means twice as many certificates than usual but the value of each is halfed.

Besides, if the calculation was based on certificate numbers there would have been discussions as to whether the President's certificate should be included in the calculation considering that you can't sell it. Would that mean that only half of the sell-able certificates (8) could end up in the open market (4)? Or, if you do count the PC, do you round up or down? In the variant where the Reading President's certificate represents three shares, how would a certificate calculation work in that case? It could also be four if you count the PC but require a rounding again if not.

If the number of certificates was the basis of the cap, I'm sure I would have heard such a discussion by now - but I haven't...
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J C Lawrence
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From the AH rules for 1830:

8.2pp8 wrote:
If less than 5 certificates have been sold, the Corporation is not yet capable of operation.


10.0pp1 wrote:
Ordinarily no player may hold more than 5 certifications in the same Corporation.


11.0pp1 wrote:
Once 5 certificates (60% of the stock) of a corporation have been sold, he Corporation is floated.


12.0pp2i2 wrote:
No further stock in a corporation may be sold if the Bank Pool already holds 50% of the stock in that Railroad.


So, assuming a company with two 20% certificates, what is the maximal percentage that may be in the Bank Pool and what is the maximal percentage holding of a single player? I suggest 60% (four 10% certificates in the pool and then sell a 20%) and 70% (two 20% certificates plus three 10% certificates for a total of 5 certificates) respectively. Additionally for such a company, if the two 20% certificates have been purchased along with two 10% certificates, for a total of 60% but only 4 certificates, arguably the company has not yet floated.
 
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clearclaw wrote:
12.0pp2i2 wrote:
No further stock in a corporation may be sold if the Bank Pool already holds 50% of the stock in that Railroad.


So, assuming a company with two 20% certificates, what is the maximal percentage that may be in the Bank Pool and what is the maximal percentage holding of a single player? I suggest 60% (four 10% certificates in the pool and then sell a 20%) and 70% (two 20% certificates plus three 10% certificates for a total of 5 certificates) respectively. Additionally for such a company, if the two 20% certificates have been purchased along with two 10% certificates, for a total of 60% but only 4 certificates, arguably the company has not yet floated.


I would interpret '50% of the stock' to mean stock with a value equal to 50% of the company.
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For a usually plain speaking contributor you have managed to totally confuse me. I don't see your point. I assume that in the example you used there is a company in which certificates are issued in a different way from the usual (ie: two 20% certificates, along with six 10% certificates). Simply using the standard rules, any combination of certificates that add up to %50 of the total stock would be the open market cap (2x20% & 1x10%; 1x20% & 3x10%; or, 5x10%). That would be three, four, or five certificates depending on the denomination - I don't see the problem. Whether the company has floated or not doesn't seem to enter the discussion in any kind of useful way.

If certificates are the basis for the determination then the game would have to spell that out (which would be much different from 1830), along with very clear examples of how such a rule could be made to work (your illustration didn't work for me, for example).
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paulclarke339 wrote:
I would interpret '50% of the stock' to mean stock with a value equal to 50% of the company.


At best it ia ambiguous. 50% of the certificates or 50% of the shares? Almost all the other wording in the rules is in terms of certificates, specifically 5 certificates, not in terms of percentage of shares. As long as the distribution of certificates is one 20 and eight 10s then there's no ambiguity, but in the case of a company with say two 20% certificates, well, everything is different.

 
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Bubslug wrote:
I assume that in the example you used there is a company in which certificates are issued in a different way from the usual (ie: two 20% certificates, along with six 10% certificates).


Assume that the Bank Pool contains four 10% certificates and I hold a non-presidential 20% certificate. Per the rules I can sell it as there are fewer than 5 certificates in the Bank Pool. After I sell it there are 5 certificates and 60% of the company in the Bank Pool.

Quote:
Simply using the standard rules, any combination of certificates that add up to %50 of the total stock would be the open market cap (2x20% & 1x10%; 1x20% & 3x10%; or, 5x10%).


The rules do not state the maximum capacity of the Bank Pool in terms of certificates. Specifically, the rules state the maximum capacity of the Bank Pool when certificates may still be sold. With for instance, four 10% certificates in the pool I am explicitly allowed to sell an additional certificate. Should that happen to be a 20% certificate, there would then be 5 certificates and 60% in the pool.

Quote:
Whether the company has floated or not doesn't seem to enter the discussion in any kind of useful way.


The rules state that a company floats when 5 certificates have been bought. If two 20% certificates and two 10% certificates have been bought, then while 60% of the company have been bought, 5 certificates have not been bought as required by the rules and the company has arguably not floated.

Quote:
If certificates are the basis for the determination then the game would have to spell that out (which would be much different from 1830), along with very clear examples of how such a rule could be made to work (your illustration didn't work for me, for example).


1830 as published does not have companies with multiple 20% certificates and 1830's rules do not address the many possible problems and ambiguities that arise with multiple 20% certificates. Various variants and expansions do have companies with multiple 20% certificates, but to date they have never fully covered all the cases in their handling.

FWLIW this ambiguity and rules complexity is the primary reason that I advocated not having companies with multiple 20% shares in the variants in the new 1830. Instead I suggested a 30% presidency for those companies. Such would achieve most of the same ends as the multiple 20% shares while minimising the complexity and rules problems.
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clearclaw wrote:
paulclarke339 wrote:
I would interpret '50% of the stock' to mean stock with a value equal to 50% of the company.


At best it ia ambiguous. 50% of the certificates or 50% of the shares? Almost all the other wording in the rules is in terms of certificates, specifically 5 certificates, not in terms of percentage of shares. As long as the distribution of certificates is one 20 and eight 10s then there's no ambiguity, but in the case of a company with say two 20% certificates, well, everything is different.



The rules to 1830 are clearly intended for a certificate/share system of ten shares represented on nine certificates (The President's Certificate representing two shares). In that case, and since the PC goes to the first purchaser, a company will float after five certificates are sold - but it is clear that six shares (60%) are thereby represented. If the distinction between certificate and share is maintained (and why should it not be) then even the Reading variant/option still works - six shares, this time represented by only four certificates, will float the company. As for the open market cap, counting shares rather than certificates still works as well.

As far as I can tell the open market cap of 50% of "shares" applies to most 18XX games (1853 is an exception having no cap) regardless of the denominations on the certificates. BTW, which game are you referring to that has two 20% certificates in an in individual company?
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Bubslug wrote:
The rules to 1830 are clearly intended for a certificate/share system of ten shares represented on nine certificates (The President's Certificate representing two shares). In that case, and since the PC goes to the first purchaser, a company will float after five certificates are sold - but it is clear that six shares (60%) are thereby represented.


The rules to 1830 are quite plain:

If less than 5 certificates have been sold, the Corporation is not yet capable of operation.

There's no mention of shares there, just certificates.

Quote:
If the distinction between certificate and share is maintained (and why should it not be) then even the Reading variant/option still works - six shares, this time represented by only four certificates, will float the company.


No, as that breaks:

8.2pp8 wrote:
If less than 5 certificates have been sold, the Corporation is not yet capable of operation.


If less than 5 certificates have been sold, the Corporation is not yet capable of operation.

Quote:
As for the open market cap, counting shares rather than certificates still works as well.


But that's not what the rules say:

No further stock in a corporation may be sold if the Bank Pool already holds 50% of the stock in that Railroad.

Quote:
As far as I can tell the open market cap of 50% of "shares" applies to most 18XX games...


Yup. That doesn't mean that 1830 shares their rules. For instance most of them also don't use 1830's relaxed track-building rules.

Quote:
BTW, which game are you referring to that has two 20% certificates in an in individual company?


First thought is the N&W in the original Coalfields and the N&W and Erie (in some variants) of the new 1830.
 
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Selling 60% of the shares in the Reading will not float it? We've been playing that wrong if so. I have to admit that could weaken my argument but on the other hand it could simply make the Reading a special case with a different "qualifying number" than other companies (seven shares vice six). Fortunately for all of us, an 18XX game with more than one multiple share certificate has not yet been produced. If one were to be then more clarification than we are seeing would certainly be needed.

As it stands, using "share" when it says "share," and "certificate" when it says "certificate" and keeping the distinction in mind answers all but hypothetical situations. Even 1830 uses "shares" when addressing the open market cap, not "certificates," and IIRC that's where this discussion began.
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Bubslug wrote:
Selling 60% of the shares in the Reading will not float it?


That depends on how those shares are bought and what house rules you're using regarding the difference between 5 certificates and 60%. The 1830 and Coalfields rules are notably silent on the area.

Quote:
Fortunately for all of us, an 18XX game with more than one multiple share certificate has not yet been produced. If one were to be then more clarification than we are seeing would certainly be needed.


Uhh, sorry? The Erie and N&W in some of the new 1830 variants have two 20% certificates, 1835 is heavily entirely based around companies with multiple 20% certificates, 1869 has companies with multiple certificates ranging from 10%-20%-30%-40 and often all in the same company IIRC, and I'm sure there are others.

Quote:
As it stands, using "share" when it says "share," and "certificate" when it says "certificate" and keeping the distinction in mind answers all but hypothetical situations. Even 1830 uses "shares" when addressing the open market cap, not "certificates," and IIRC that's where this discussion began.


The applicable statement in the 1830 rules is:

No further stock in a corporation may be sold if the Bank Pool already holds 50% of the stock in that Railroad.

And that doesn't mention either shares or certificates. It is left to the reader to pick an assumed antecedent for the implied pronoun.
 
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clearclaw wrote:
Bubslug wrote:
Selling 60% of the shares in the Reading will not float it?


That depends on how those shares are bought and what house rules you're using regarding the difference between 5 certificates and 60%. The 1830 and Coalfields rules are notably silent on the area.

Quote:
Fortunately for all of us, an 18XX game with more than one multiple share certificate has not yet been produced. If one were to be then more clarification than we are seeing would certainly be needed.


Uhh, sorry? The Erie and N&W in some of the new 1830 variants have two 20% certificates, 1835 is heavily entirely based around companies with multiple 20% certificates, 1869 has companies with multiple certificates ranging from 10%-20%-30%-40 and often all in the same company IIRC, and I'm sure there are others.

Quote:
As it stands, using "share" when it says "share," and "certificate" when it says "certificate" and keeping the distinction in mind answers all but hypothetical situations. Even 1830 uses "shares" when addressing the open market cap, not "certificates," and IIRC that's where this discussion began.


The applicable statement in the 1830 rules is:

No further stock in a corporation may be sold if the Bank Pool already holds 50% of the stock in that Railroad.

And that doesn't mention either shares or certificates. It is left to the reader to pick an assumed antecedent for the implied pronoun.


Yes, that is the rule for 1830 (and 1856 where certificates can have different denominations) but 1830 does not have denominations other than 10% that are sell-able. In practical terms 50% means five shares which also happens to mean five certificates.

If the other games you mention have an open market cap and word it the same way, then they are poor examples of rules syntax since the hole for ambiguity becomes a mile wide. Readers being left to puzzle out whether they are to consider shares or certificates is ludicrous and the concept of a market cap becomes virtually meaningless.

A construction that permits as little as 30% or as much as 70% of the total value of the company to be in the open market, depending on the specific denominations (but more importantly how you interpret the rule), is beyond my comprehension. I cannot imagine why anyone would design a market that could operate that way; but the problem only exists if one insists on using certificates as the basis for transactions rather than shares of a defined and equal value but which allows certificates of varying share denominations. Surely the designers had something less vague in mind in conceptual terms (50% of the value of a corporation seems reasonable) but if they really meant it to be a specific percentage of the company's certificates (regardless of size) then surely they would have said so. I plead for Occam's razor here...

My admiration of the 18XX universe is being badly shaken here...
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Bubslug wrote:
If the other games you mention have an open market cap and word it the same way, then they are poor examples of rules syntax since the hole for ambiguity becomes a mile wide. Readers being left to puzzle out whether they are to consider shares or certificates is ludicrous and the concept of a market cap becomes virtually meaningless.


You are over-reacting. The 1830 rules in this case are are not ambiguous unless there are multiple 20% certificates per company, and that's not the case in 1830. This not-really-a-problem only exists for the 1830 variants that have not bothered to define their own rules. The other 18xx that I know of with multiple larger certificates have largely bothered to fully define their rules in this area.

Quote:
A construction that permits as little as 30% or as much as 70% of the total value of the company to be in the open market, depending on the specific denominations (but more importantly how you interpret the rule), is beyond my comprehension.


Rules are just that: (arbitrary) rules. The only requirements are that the players understand them and that they form an interesting game.

Quote:
...but if they really meant it to be a specific percentage of the company's certificates (regardless of size) then surely they would have said so. I plead for Occam's razor here...


I have no interest in authorial intent and find the differentiation between certificates and shares quite clear, and the failure of 1830's rules writers to account for a case that doesn't exist and couldn't happen in the game they were describing quite understandable.

Quote:
My admiration of the 18XX universe is being badly shaken here...


That seems silly.
 
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clearclaw wrote:
The 1830 rules in this are are not ambiguous unless there are multiple 20% certificates per company, and that's not the case in 1830. This not-really-a-problem only exists for the 1830 variants that have not bothered to define their own rules. The other 18xx that I know of with multiple larger certificates have largely bothered to fully define their rules in this area.


I thought that was the point I was trying to make: that the distinction in 1830 is largely moot, but by not needing to make a distinction there can lead to problems when encountering similar situations in other games in the series where the distinction is more important - and you are now telling us that games employing multiple larger certificates do define their terms better which I was sure they'd have to do. Those that don't simply underline the potential problem I've been on about and one with which you seem to agree.

If I'm over-reacting I apologize, but it may be because I'm struck by the clarity of the 1853 rules regarding all the things we've been discussing when it comes to "certificate limits," "share limits in any company per person" and "qualifying share numbers" when it comes to capitalizing companies. The table defining these as a function of the number of players is a model of clarity that the share cap definition in 1830 could have used. There, the distinction between a certificate and a share and the application of the terms is clear and one I find very useful.
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Bubslug wrote:
I thought that was the point I was trying to make: that the distinction in 1830 is largely moot, but by not needing to make a distinction there can lead to problems when encountering similar situations in other games in the series where the distinction is more important - and you are now telling us that games employing multiple larger certificates do define their terms better which I was sure they'd have to do. Those that don't simply underline the potential problem I've been on about and one with which you seem to agree.


The other games have largely defined how to handle the area (tho I recall that 1869: USA West's rules in this area aren't very good). It is only the 1830 variants which have a problem.

Quote:
If I'm over-reacting I apologize, but it may be because I'm struck by the clarity of the 1853 rules regarding all the things we've been discussing when it comes to "certificate limits," "share limits in any company per person" and "qualifying share numbers" when it comes to capitalizing companies.


1853 came quite a bit later and much had been learned by then, both about rules-writing and the corners of the 18xx universe.
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