Stock sales for AI companies

[ohms_law]

Can the AI be made to issue new stocks, please? The way that AI companies go public and then never do anything with their stock really limits the AI companies.
Also, lots of AI companies end up with stock prices in the $1,000's, which isn't terrible realistic (they're not all Berkshire Hathaway!)
The AI should also use the stock split feature, as well.
It should also help with AI CEO's ending up with 100% ownership of the stock but the company still being public as well.

[paulwoman]

Go to viewforum.php?f=14 and make a "poll".

If it's possible to code this, it'd be a nice thing.

[Brutus]

I'm pretty sure in the old capitalism or an older build the AI would issue more stock as I can recall having gotten stock in a company and was trying to take it over but the AI kept issuing more stock every time I got close to 50% it was like an ever shifting goal post.

I wonder if the code was changed or altered since ...

[David]

Like companies in the real world, AI companies in general prefer issuing bonds to issuing new shares, as additions of new shares dilute ownership shares. That's also why we don't see many new share issuances by public companies whereas bond issuances are very common and happen on a frequent basis.

I did run a test game with the bond system disabled, as you will see in the attached screenshot, one AI company did issue new shares twice in a short time span of slightly more than 2 years.

[paulwoman]

Also, lots of AI companies end up with stock prices in the $1,000's, which isn't terrible realistic (they're not all Berkshire Hathaway!)

If increasing capital for the purpose of investment occurs less frequently than issuing shares, having the IA make splits or reverse splits more frequently would be a good idea.

There is a site in French, who explains that very well.

Site in French
https://www.postfinance.ch/fr/particuli ... depot.html

Site with google translate

https://translate.google.com/translate? ... depot.html

A price that is too high or too low can harm the company. Hence the need to make a split or reverse split depending on the situation, if not a share buyback if the company finds itself with too much liquidity.

[Brutus]

Ì see a quite a few companies go into negative income spirals due to bonds though.

They take out massive bonds to save the company but it's really the finishing blow to their finances because they cannot payback the interest even if their company somewhat bounces back.

That's why Is see a lot of companies with the same amount of annual loss as their interest costs for example. They did manage to bounce back somewhat but are now even weaker because they got a crippling weight hanging around their neck charging large interest sums. They only got a postponement of execution

I actually find it very interesting to see, but the company was probably way better situated for a stock dilution then to take on more bond debt. Stock dilution won't harm the companies long term viability nearly as much as bonds do. Bonds are a much more logical choice if the company is doing well and wants to expand quickly but doesn't have the cash but right now it seems companies in dire straights issue bonds when they are in financial trouble when that only exacerbates the problem.

Can someone else confirm or refute my anecdotal observation?

[ohms_law]

That's exactly how I find the companies that are in trouble with the way the game is currently structured. Watch the bond market, and big companies who start taking out lots of bonds are sure to be the ones going bankrupt in a few years.

Bonds are supposed to be used for expansion, not really as "rescue funds". Companies in the real world looking to get out of financial trouble end up with "junk" rated bonds, and from what I'm seeing the rating agency in the game isn't sensitive enough to this (although it does happen). Any bond issue with a rating better than "D" should be for expansion.

Plus, there still ends up being a bunch of companies that players (or the AI, for that matter) can't purchase stocks in because the CEO owns all or almost all of the stock. Really, this just gets to be no fun after a while.

[David]

We will improve it in the upcoming version 6.5.18.

Here is a description of the outcome of the planned improvement:

When needing to raising funds, AI will first attempt to issue new shares if it is already heavily in debt or it has got a poor credit rating. Note that each AI person has a different tolerance level of debt, which is one of the traits affected by their Character attribute (ranging from Conservative to Very Aggressive, as indicated on the Personality page of the Person report.)

[David]

Update: v6.5.18 is out. You may download it from: viewtopic.php?f=7&t=7798

[cantdownloadit]

would be nice to be able to issue different share classes, so there are

class A shares for example that have company voting rights etc, the AI would seek to own these

class B shares that attract a dividend but have no voting rights, so AI would not seek to own these

This would also remove needs to control at least 50% to control the company. An example being the Ford Family whose 4% share holding controls 40% of the vote.