Note before we continue:
We did some thinking about the jump in consumer spending that happened during 2016 and we can provide an alternative account: We lowered the income tax temporarily to between 16-18% as we tried to achieve a 100 rating in the income&jobs. That MIGHT have put some extra cash inside people´s pockets which they diligently spent inside the stores.
We´ll keep this in mind.
Now to our corporation.
FINANCES.
As we mentioned before, we noticed both a drop in inflation and an increase in interest rates early on. We then decided to get rid of our remaining debt, without making that our priority, and finished the process in early 2018.
In the Balance sheet you will notice that we currently have zero outstanding debt, but that we have made use of the revolving facility from time to time, mainly to purchase stocks in bulk when cheap.
You will also notice the huge increase (58%) in the value of our assets, from 22,5 to 35 billion$, and that the main component of these are stocks, for the first time (about 60% of the total).
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Our net income increased by 19% to 1,5 billion$/year.
Also, our R&D expenses have increased as we built a few extra labs.
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The stock Market price is nearing 17k$/share and the over-valuation is still close to the average of the nation at 1$ real asset for 1.37$ in the market.
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In the stock ownership menu you will see the outcome of our market-dealing with the toy corporations: We decided to sell Tricubic Space and buy Mankind.
First of all Mankind had more share % available for purchase than Tricubic.
Second, and most important, at one point Mankind decided to buy the videogame console technology from Tricubic and started producing and selling their own product.
To us that meant two things:
a) A (temporary) lower stock price for Mankind and a higher stock price for Tricubic.
b) A future market share loss and lower profit margins for Tricubic´s only consumer item.
Once that was clear, we decided to make haste: Acquired 50,1% of Mankind, sold all our Tricubic claims, purchased both toy technologies from our new "subsidiary" and directed our R&D department to enhance the designs.
After a while, we decided to increase further our ownership in Mankind as much as we could, as the price was still cheap. At this moment all shares in Mankind are "private", so we ought to spend 250mm$ extra to get the ownership to 75%, in case we wanted to place them fully inside our orbit, and so be able to dictate management.
Anyway, we could always sell the stock and use the proceeds to start our own subsidiary from scratch.
Another purchase in this period has been Samurai Trinity, one of the two existing investment corporations.
Having 50,1% of their stock allows Tomahawk to purchase their portfolio at market prices (no premium asked).
If we´d aim to achieve control over the whole lot of the corporations these investment players are a key step.
We´ll talk briefly about that possibility in another post.
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Finally, you will notice some of our subsidiaries in the menu:
As we had enough idle cash starting 2018 we decided to purchase some of their shares when cheap, with a view to sell them later if demand appears.
Tidy-Mart is finally showing a profit while Buzzard keeps losing money.
We also did an IPO for our Gazette in late 2016:
THE ADVERTISEMENT INDUSTRY:
The Sylvania´s Business Gazette summary:
1-Starting with one newspaper in each city, a 2008, 10% ad market share provided us with 60-65mm$ income.
2-In 2010, as the profits had increased, we decided to expand our operations: by purchasing a cheap private TV station and building four radio stations, plus another newspaper purchased in 2011. Our aim was to gain extra market share. This expansion proved fruitless.
3-From 2010 until 2016 our Gazette still held a positive revenue. We waited to see if our manager would sell or close any of the non-performing firms, but didn´t.
4-Finally, in 2016 we purchased Hyper Power´s TV station in Lambs Grove for 400mm$, as we had access to capital and were hungry for yield (when money is cheap performing businesses are dear!): We had 5 year savings plus the money raised in the IPO.
We´ll show two charts to explain the evolution of the industry: one related to corporate expenditures and the other to publisher´s income.
The first merely expands upon the chart that we published in our previous ad industry report.
1-We can see a steep decline in corporate ad expenditures just after our landing, as publishers kept slashing their prices because of the extra competition.
2-In 2012 and again in 2016 total expenses increased because of new corporations created.
3-Finally we have a spending binge in 2019 as we witnessed two AI mergers (their brand gets all messed up).
4-You will notice that our subsidiaries spent less than the "public" corporations: the yellow line decreases as their brand-building kind of "ends", not so with the orange line. That´s because we limit the sectors where our creatures expand, so their brand tends to be cheaper and in some cases more stable.
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The second shows who got the money pie. We added total expenditures (green line) to give a better perspective.
1-Blue line are city publishers, orange AI publishers and yellow our Gazette.
2-We can see how we took off in 2017 thanks to Hiper Power´s TV station. That gave us our current 30% market share, with 210mm$ profits, while depriving our "competitors" (AI) from a valuable source of income.
3-Finally, city publishers command a neat 50% of the market share.
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