Manipulation leads to issuing negative shares

[David]

Reverse stock split (also called stock merge) is already implemented in the latest version. It will happen when a stock's price falls below $1.0.

Here is its message template:


All publicly-traded stocks are required to maintain a minimum bid price of at least $1.00 per share.

Your company's stock currently trades at $0.99 and therefore a reverse stock split is required.
A 1-<n> reverse stock split will group every <n> shares into one share.
The resulting stock price will be $9.99"

(the following screenshot shows how the news message looks like)

---------------------

The functionality of stock split has been implemented already as well. But we haven't decided on the conditions that trigger or the criteria in which the player is allowed to execute a stock split. Any suggestions?

[counting]

Personally I don't think there needs to be a condition for "split", but an active action like issuing new shares. The only other possible trigger I can think of is that when number of shares drop to a point where 0.01% (that is a company has less than 10,000 shares, which is very unlikely in normal situation) can't consist 1 share, then there's reason to auto-split it.

In game mechanism wise, there should be limit about the ratio of split, and how much time between split, and of course not over the cap of 1 billion shares. And split needs to have some actual function in game, otherwise there's no point implementing it. In real world, split can increase the liquidity of the stock, since more potential investors can buy it now, so perhaps the in game split can increase the "velocity" of stock price changes, or changes with wider range to reflex the effect, in proportion to "white stocks" hold by "general public".

P.S. Since reverse split is automatic at such a low price, I don't think there is a chance of "accidental forward split" causing issues though.

[David]

In game mechanism wise, there should be limit about the ratio of split, and how much time between split, and of course not over the cap of 1 billion shares. And split needs to have some actual function in game, otherwise there's no point implementing it. In real world, split can increase the liquidity of the stock, since more potential investors can buy it now, so perhaps the in game split can increase the "velocity" of stock price changes, or changes with wider range to reflex the effect, in proportion to "white stocks" hold by "general public".

This is exactly what we have been thinking - a stock split actually won't have any impacts on the stock price changes, as a reverse stock split also won't impact the stock movement trend. And we haven't identified a solid reason why a player would like to actively execute a stock split and this explains why the function is currently not available in the game.

[counting]

Ya, most real world reasons for split don't apply in game. Why I mentioned stock liquidity is because it's one of the few mechanism that could affect game play. If players wish to "gamble" on stock market, price changing more often and more dramatic can be more exciting (higher risk).

Real world stock price rarely exceed certain number, it's somehow related to human psychic, and the need of comparing some simple index between companies. And the split of stock usually can grant company's stock share more marketability to raise funds. This could be a second reason of in-game stock split, since there's a cap of how many cash a company can get in one run of issuing stocks in game. Maybe there could be a slight increase of this cap if it's related to split in lower price though. In the real world, cheaper price doesn't always attract more investors, usually there is a sweet spot, not too high and left out some potential future stock investors to trade on secondary market (hence more contractors in primary market would like to invest), also not too low to let the stock seem unworthy (look desperate).

Also this could help with gradual penalty when the price is too high. Right now if a share's price is extremely high to a threshold, you can't even issuing new shares, like anonymous millionaire stock investors don't exist.

[counting]

On a separate note, if split can be an manual active mechanism, maybe reverse split can also be manual on top of automatic below $1.00 price. And we could have cold combo like forward split

[David]

Your points are well noted and I will forward them to the development team.