by RougeRogue » Thu Feb 07, 2013 11:22 am
David wrote:The below case you described in the previous post will be prohibited in the new version.
Let's say "Player Co." owns 75% of Company B, and 75% of Company C.
Both Company B and Company C each own 50% of Company D (so, they own 100%, between them, Player Co. owns no Company D stock, directly).
Company B buys 5% of Company D's stock from Company C -- since both Company B and Company C are controlled by Player Co., perhaps the price of Company D's stock should not change, with that transaction -- the transaction occurs at the current market price, to prevent Player Co. from being able to drive up Company D's stock price by swapping stock back and forth between Company B and Company C.
Excellent, and well done!
Tell me, would this also forbid the player from forcing a company that a subsidiary company has control of (in the above example, "Company B" controlling "Company D") from
buying back its own stock?
If so,
this would also fix the 'bum-rush' manipulation, where the player might use a cash-rich Company B to buy up
ALL available shares of Company D, then forcing Company D to buy back its own, now-greatly over-priced shares from Company B, until its cash is exhausted, leaving Company D virtually bankrupt, and Company B a little bit richer (after selling off Company D's shares, once again).
[quote="David"]The below case you described in the previous post will be prohibited in the new version.
[color=#0000BF]Let's say "Player Co." owns 75% of Company B, and 75% of Company C.
Both Company B and Company C each own 50% of Company D (so, they own 100%, between them, Player Co. owns no Company D stock, directly).
Company B buys 5% of Company D's stock from Company C -- since both Company B and Company C are controlled by Player Co., perhaps the price of Company D's stock should not change, with that transaction -- the transaction occurs at the current market price, to prevent Player Co. from being able to drive up Company D's stock price by swapping stock back and forth between Company B and Company C.
[/color][/quote]
Excellent, and well done!
Tell me, would this also forbid the player from forcing a company that a subsidiary company has control of (in the above example, "Company B" controlling "Company D") from [i]buying back its own stock[/i]?
If so, [u]this would also fix[/u] the 'bum-rush' manipulation, where the player might use a cash-rich Company B to buy up [b]ALL[/b] available shares of Company D, then forcing Company D to buy back its own, now-greatly over-priced shares from Company B, until its cash is exhausted, leaving Company D virtually bankrupt, and Company B a little bit richer (after selling off Company D's shares, once again).