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Val'Dore
Word Bearers of Chaos
Word of Chaos Undivided
Posted - 2011.07.05 15:59:00 - [31]
 

One of the problems is that money should not be able to flow into and out of a corporate wallet on a whim. There has to be a legitimate transaction of business. An investment of capital, a product purchase or sale, or a compensation plan for 'employees'. It isn't realistic that a CEO has total control of a corporation without any sort of checks or balances in place.

The power should be in the shares, not the position. If you are a CEO with 100% ownership, than that is fine. But any corporation trying to sell itself, needs to have some sort of accountability in place... and I don't mean the honor system kind.

Bagehi
Association of Commonwealth Enterprises
Posted - 2011.07.05 17:20:00 - [32]
 

Originally by: Val'Dore
One of the problems is that money should not be able to flow into and out of a corporate wallet on a whim. There has to be a legitimate transaction of business. An investment of capital, a product purchase or sale, or a compensation plan for 'employees'. It isn't realistic that a CEO has total control of a corporation without any sort of checks or balances in place.

The power should be in the shares, not the position. If you are a CEO with 100% ownership, than that is fine. But any corporation trying to sell itself, needs to have some sort of accountability in place... and I don't mean the honor system kind.

Even at 100% ownership, there are legal restriction on how corporate assets can be used. To the people talking about rating agencies... lulwut? Are you talking about bonds? There are news companies that specialize in giving people insight into what corporations are doing so they can make mildly educated purchasing decisions when it comes to their stock portfolio. But, as far as price goes, it is based on the going rate. The going rate is a supply/demand thing. People use many different metrics to determine their own valuation of a stock. Current Ratio, Price/Book, Debt/Equity, PEG Ratio, Short/Float, Short Ratio, RoE, and many others to get an idea what direction the stock price will be going in the x time-frame they plan on holding an investment. Some will forecast future value based on these metrics, then run their favorite NPV calculation to determine which stock to purchase. The calculations are often automated. Buy orders and sell orders based on changes to these numbers, and of course, the actual list price.

The reason we do not have a stock market in Eve is because there are no regulations, or inter-corporate checks and balances (such as the locking of assets that can be verified by stock holders), and there are no trusted external audits of corporate finances. Most importantly, there are no exchanges (would require fairly heavy API traffic if they were player-made and would require a financial incentive to build such a thing).

Apice
Posted - 2011.07.05 20:40:00 - [33]
 

As it stands there's just too many ways for an investor to get screwed with little to no repercussions for corporations or individuals. If they do implement a stockmarket it would have to be locked down pretty tight with a pretty transparent money trail.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.05 20:57:00 - [34]
 

Originally by: Kaelie Onren

A step in the right direction, but still the problem is that a corp can liquidate all its assets without ANY say from the shareholders. Thereby making shareholders essentially powerless.

A good start would be to allow shareholders to vote on important corp decisions and having a periodic financial report. But this is a Sisyphean task, as long as directors can pull money out/in at will, and as long as money moves without regulation in the galaxy, there can never be enough 'trust' in the system for people to buy any equity shares.

As much as I would LOVE to see this, it just won't happen in EVE without some big regulatory changes to install trust in the market in credit, both personal credit and corporate credit.



I focus on the data and not on the "rules" for the stock thing. The more "rules" we request CCP to code, the less likely they are to do it. Setting up data views of things as I suggested is easy, setting up some votes to allow the taking down of a POS or moving some cash between wallet divisions is asking more than we can reasonably expect. Point being, the less we request, the more we're likely to achieve.

I often make this error in my suggestions too :)

I'd love to see full stocks, bonds etc myself. What is the minimal needed that can CCP can reasonably deliver.

Kaelie Onren
Minmatar
Posted - 2011.07.06 04:03:00 - [35]
 

Edited by: Kaelie Onren on 06/07/2011 04:03:28
Quote:
The reason we do not have a stock market in Eve is because there are no regulations, or inter-corporate checks and balances (such as the locking of assets that can be verified by stock holders), and there are no trusted external audits of corporate finances. Most importantly, there are no exchanges (would require fairly heavy API traffic if they were player-made and would require a financial incentive to build such a thing).


Exactly what I said. Lack of regulatory body. A real SCC. Lack of any form of fiscal prudency, money transfers are 'free' and unrestricted.

Bonds are a good point. There is no bond market in EVE (read 'IN'), same problem. It's risky, BUT at least a bond has a coupon, and 'SOME' form of rating (though not in game). If bonds, which are less risky than equity cannot manage to get traded in the game, then equity cannot.

Quote:
I focus on the data and not on the "rules" for the stock thing. The more "rules" we request CCP to code, the less likely they are to do it. Setting up data views of things as I suggested is easy, setting up some votes to allow the taking down of a POS or moving some cash between wallet divisions is asking more than we can reasonably expect. Point being, the less we request, the more we're likely to achieve. I often make this error in my suggestions too :) I'd love to see full stocks, bonds etc myself. What is the minimal needed that can CCP can reasonably deliver.


Oh, they can do this simple enough I think, but this will be what will happen:
1) stocks all go into the market... the prices explode upwards
2) prices crash and new companies join continuously
3) people who are screwed by the corporate manipulation of share prices give up
4) stock exchange becomes a dead unused feature, no better than a gambling game called 'tossing a coin'


Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.06 05:08:00 - [36]
 

Edited by: Adunh Slavy on 06/07/2011 05:14:03
Originally by: Kaelie Onren


Oh, they can do this simple enough I think, but this will be what will happen:
1) stocks all go into the market... the prices explode upwards
2) prices crash and new companies join continuously
3) people who are screwed by the corporate manipulation of share prices give up
4) stock exchange becomes a dead unused feature, no better than a gambling game called 'tossing a coin'




Those are certainly risks and could happen, could happen no matter what safe guards are put in place. The more data, and relevant data exposed, the more informed a choice can be. As with most scams in Eve, there is always some little detail that doesn't add up.

I suspect you're right, many stocks would just be scams. The exchange would have a rough start. I'm also of the opinion that, over time well behaved equities would stand out. Eve would get its own collection of blue chips.

BTW, here is the bond discussion I was 'hosting'

http://www.eveonline.com/ingameboard.asp?a=topic&threadID=1524146

Chevalleis
The Legendary Conquest
Posted - 2011.07.06 06:33:00 - [37]
 


Kaelie Onren
Minmatar
Posted - 2011.07.06 07:15:00 - [38]
 

Edited by: Kaelie Onren on 06/07/2011 07:16:42
Originally by: Adunh Slavy
Those are certainly risks and could happen, could happen no matter what safe guards are put in place. The more data, and relevant data exposed, the more informed a choice can be. As with most scams in Eve, there is always some little detail that doesn't add up.

I suspect you're right, many stocks would just be scams. The exchange would have a rough start. I'm also of the opinion that, over time well behaved equities would stand out. Eve would get its own collection of blue chips.




Thanks for the link. A good read.

One thing that is the problem though is that in real life, think about what Equity means. It means that you have a share of the company. What is the fundamental worth of this share? Sure you can use 'indicators' like EPS EBITDA etc... but these are just markers, indicators. What is the fundamental worth of a share of stock?

1) the dividend income stream the company chooses to issue
2) the worth of the share when the company is bought out by another. (mergers and acquisitions)

#1 we have in EVE
#2 we don't there is no mechanic by which a company can have wholly owned subsidiaries, and have those sub companies balance sheets all roll back up into a parent company.

Also, why do companies acquire others in the real world in the first place? They want to take their assets. Their systems, their people.
In EVE assets and people move freely, and without cost. Companies have no assets which are not instantly transferable, like official bond ownerships, debt, computers... perhaps the only thing would be POSs and outposts, and office rental contracts.

Of course, the biggest elephant in the room is in the real world, if your company is going to be taken over, you would think twice about stealing company assets and making off with them in the chaos. You would be found out and thrown in jail. EVE has NO working judicial system, so people would just tear a corps assets away and run for the hills if they were going to be taken over.

Thus, take overs would not be done.

Therefore the price of shares will have NO FUNDAMENTAL worth, besides Dividends payout.

Shaky, but I suppose it may work, but it will be no more trustworthy than the current off market bonds that are sold.

Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.07.06 16:54:00 - [39]
 

Originally by: Kaelie Onren

Stuff



All good points, and I am sure there are many other unknowns as well. Reasonably CCP isn't going to code all that, and if they did, with all due respect, something about it would be less than ideal. So if it is a simpler system to start, let players figure out how to use it and abuse it, then fix or enhance those things.

If it is a second class of shares as well, then CCP doesn't have to potentially break the existing system either.

Fortis88
Posted - 2011.07.09 17:11:00 - [40]
 

Originally by: Kaelie Onren
Originally by: Fortis88
Edited by: Fortis88 on 04/07/2011 16:23:23
To solve your LITTLE problem, their would be a "time in business" requirement necessary to make the "Rankings List". To move up in the ranks would be determined by ASSETS, TIME in business, and the NUMBER OF with corporate membership. This would solve the issue of trust since only long standing massive membership corporations would have the public's trust. See problem solved. Wasn't that easy? Next.



Adding another artificial 'solution' to the problem doesn't fix anything. It just proves that we can go on and on finding loopholes, and you coming up with 'patches' for them. :)

I really don't think that this line of argument will be fruitful, but just to show you that we 'can' go on forever...

So I start up a holding corp. leave it running for 3 years. Day 1, I issue stock to my friends of this corp. Day 2 I put ALL the money made from my WH alliance into it, the whole bank, this includes the treasuries of many corps in my alliance. stock price shoots through the roof because stock price is determined by some fixed formula *shakes head*. Day 3+ we sell our stock, make lots of isk.
suck out all the money out of the holding corp put back into alliance. price drops, we don't care, we sold all shares already.

Stock prices (heck any commodity) cannot be set by a formula. It doesn't work. If you managed to figure out a way that this would work, then you would have invented communism.


Your argument doesnt hold water. Saying that someone would be in business for 3 years and just sell everthing to screw over a few people to make a little money...come on. After about 3 years, if that person hasnt made a billion isk there's somenthing wrong. If they did do it, it would be for fun, not for isk. And thats ok. Loop holes are what make this game great. Everything can go wrong. So i really dont see the problem. MOST people would not do that just because they would use the stock market instead of trying to destroy something that was finally implemented. But even if they do..so what.

Kaelie Onren
Minmatar
Posted - 2011.07.09 17:34:00 - [41]
 

Originally by: Fortis88
Originally by: Kaelie Onren
Originally by: Fortis88
Edited by: Fortis88 on 04/07/2011 16:23:23
To solve your LITTLE problem, their would be a "time in business" requirement necessary to make the "Rankings List". To move up in the ranks would be determined by ASSETS, TIME in business, and the NUMBER OF with corporate membership. This would solve the issue of trust since only long standing massive membership corporations would have the public's trust. See problem solved. Wasn't that easy? Next.



Adding another artificial 'solution' to the problem doesn't fix anything. It just proves that we can go on and on finding loopholes, and you coming up with 'patches' for them. :)

I really don't think that this line of argument will be fruitful, but just to show you that we 'can' go on forever...

So I start up a holding corp. leave it running for 3 years. Day 1, I issue stock to my friends of this corp. Day 2 I put ALL the money made from my WH alliance into it, the whole bank, this includes the treasuries of many corps in my alliance. stock price shoots through the roof because stock price is determined by some fixed formula *shakes head*. Day 3+ we sell our stock, make lots of isk.
suck out all the money out of the holding corp put back into alliance. price drops, we don't care, we sold all shares already.

Stock prices (heck any commodity) cannot be set by a formula. It doesn't work. If you managed to figure out a way that this would work, then you would have invented communism.


Your argument doesnt hold water. Saying that someone would be in business for 3 years and just sell everthing to screw over a few people to make a little money...come on. After about 3 years, if that person hasnt made a billion isk there's somenthing wrong. If they did do it, it would be for fun, not for isk. And thats ok. Loop holes are what make this game great. Everything can go wrong. So i really dont see the problem. MOST people would not do that just because they would use the stock market instead of trying to destroy something that was finally implemented. But even if they do..so what.


Please take a Econ 101 class and report back afterwards.

(PS, the '3 years' was illustrative. Made to show a point. If you think its too long, then make its 2 years, or 1 year, or 6 months. Point is the same. Besides, how hard would it be to make a corp for your alt, and let it lay fallow for a while, or even better, buy a old corp from someone.)

Fortis88
Posted - 2011.07.09 17:54:00 - [42]
 

Originally by: Kaelie Onren
Originally by: Fortis88
Originally by: Kaelie Onren
Originally by: Fortis88
Edited by: Fortis88 on 04/07/2011 16:23:23
To solve your LITTLE problem, their would be a "time in business" requirement necessary to make the "Rankings List". To move up in the ranks would be determined by ASSETS, TIME in business, and the NUMBER OF with corporate membership. This would solve the issue of trust since only long standing massive membership corporations would have the public's trust. See problem solved. Wasn't that easy? Next.



Adding another artificial 'solution' to the problem doesn't fix anything. It just proves that we can go on and on finding loopholes, and you coming up with 'patches' for them. :)

I really don't think that this line of argument will be fruitful, but just to show you that we 'can' go on forever...

So I start up a holding corp. leave it running for 3 years. Day 1, I issue stock to my friends of this corp. Day 2 I put ALL the money made from my WH alliance into it, the whole bank, this includes the treasuries of many corps in my alliance. stock price shoots through the roof because stock price is determined by some fixed formula *shakes head*. Day 3+ we sell our stock, make lots of isk.
suck out all the money out of the holding corp put back into alliance. price drops, we don't care, we sold all shares already.

Stock prices (heck any commodity) cannot be set by a formula. It doesn't work. If you managed to figure out a way that this would work, then you would have invented communism.


Your argument doesnt hold water. Saying that someone would be in business for 3 years and just sell everthing to screw over a few people to make a little money...come on. After about 3 years, if that person hasnt made a billion isk there's somenthing wrong. If they did do it, it would be for fun, not for isk. And thats ok. Loop holes are what make this game great. Everything can go wrong. So i really dont see the problem. MOST people would not do that just because they would use the stock market instead of trying to destroy something that was finally implemented. But even if they do..so what.


Please take a Econ 101 class and report back afterwards.

(PS, the '3 years' was illustrative. Made to show a point. If you think its too long, then make its 2 years, or 1 year, or 6 months. Point is the same. Besides, how hard would it be to make a corp for your alt, and let it lay fallow for a while, or even better, buy a old corp from someone.)



Taken it. But that has nothing to do with this game. Like someone mentioned earlier, if you make the economic system too complex, CCP will not bother with it. This is a game and as such it will most likely not be as real as the actual stock market. And if someone is clever enough to find a loop hole and exploit the system...more power to em. HOWEVER, not everyone will do that. Most will use and enjoy the stock market system.

Kaelie Onren
Minmatar
Posted - 2011.07.10 08:20:00 - [43]
 

Originally by: Fortis88


Taken it. But that has nothing to do with this game. Like someone mentioned earlier, if you make the economic system too complex, CCP will not bother with it. This is a game and as such it will most likely not be as real as the actual stock market. And if someone is clever enough to find a loop hole and exploit the system...more power to em. HOWEVER, not everyone will do that. Most will use and enjoy the stock market system.


Indeed? Then I'm going to presume that you either are telling a tall tale for the sake of argument; failed said econ 101 class; or have not played EVE longer than 1 year.

Everyone who has lived in New Eden longer than their trial account knows that when there is an exploit, there will be people to exploit it. Look at Jita, there are still constant scammers in local looking for easy marks. If you really think that people will be honorable mostly, just take a look at the bond market. (there isn't an in-game one... hmmm I wonder if THAT is significant?) and bonds have REAL worth. IE the funds that were deposited for debt. If these fail to find a 'market' in game, think about why, and then ask yourself why equities, which are basically worthless, might fair better.
If you can't figure it out, then I will support this proposal. I would love an equity market based on fictitious prices that I can manipulate to make money off suckers! :) Then I'll start a ISK pyramid scheme while I'm at it!

Fortis88
Posted - 2011.07.10 17:58:00 - [44]
 

Originally by: Kaelie Onren
Originally by: Fortis88


Taken it. But that has nothing to do with this game. Like someone mentioned earlier, if you make the economic system too complex, CCP will not bother with it. This is a game and as such it will most likely not be as real as the actual stock market. And if someone is clever enough to find a loop hole and exploit the system...more power to em. HOWEVER, not everyone will do that. Most will use and enjoy the stock market system.


Indeed? Then I'm going to presume that you either are telling a tall tale for the sake of argument; failed said econ 101 class; or have not played EVE longer than 1 year.

Everyone who has lived in New Eden longer than their trial account knows that when there is an exploit, there will be people to exploit it. Look at Jita, there are still constant scammers in local looking for easy marks. If you really think that people will be honorable mostly, just take a look at the bond market. (there isn't an in-game one... hmmm I wonder if THAT is significant?) and bonds have REAL worth. IE the funds that were deposited for debt. If these fail to find a 'market' in game, think about why, and then ask yourself why equities, which are basically worthless, might fair better.
If you can't figure it out, then I will support this proposal. I would love an equity market based on fictitious prices that I can manipulate to make money off suckers! :) Then I'll start a ISK pyramid scheme while I'm at it!




I dont think you read what I said at all. let me post it again. "And if someone is clever enough to find a loop hole and exploit the system...more power to em."

Kaelie Onren
Minmatar
Posted - 2011.07.10 21:32:00 - [45]
 

Originally by: Fortis88
Originally by: Kaelie Onren
Originally by: Fortis88


Taken it. But that has nothing to do with this game. Like someone mentioned earlier, if you make the economic system too complex, CCP will not bother with it. This is a game and as such it will most likely not be as real as the actual stock market. And if someone is clever enough to find a loop hole and exploit the system...more power to em. HOWEVER, not everyone will do that. Most will use and enjoy the stock market system.


Indeed? Then I'm going to presume that you either are telling a tall tale for the sake of argument; failed said econ 101 class; or have not played EVE longer than 1 year.

Everyone who has lived in New Eden longer than their trial account knows that when there is an exploit, there will be people to exploit it. Look at Jita, there are still constant scammers in local looking for easy marks. If you really think that people will be honorable mostly, just take a look at the bond market. (there isn't an in-game one... hmmm I wonder if THAT is significant?) and bonds have REAL worth. IE the funds that were deposited for debt. If these fail to find a 'market' in game, think about why, and then ask yourself why equities, which are basically worthless, might fair better.
If you can't figure it out, then I will support this proposal. I would love an equity market based on fictitious prices that I can manipulate to make money off suckers! :) Then I'll start a ISK pyramid scheme while I'm at it!




I dont think you read what I said at all. let me post it again. "And if someone is clever enough to find a loop hole and exploit the system...more power to em."


Okay... I don't disagree with you on that one. But the issue then becomes, with so many existing flubs* in the game that need fixing like the FW system, the bounty system, do you really think it wise for CCP to push out another one? After all the threads about "commitment to quality" and "stop rolling out crap" directed at CCP in this and many forums? I think that sorta sums up this thread. Good idea, no practical way to (yet) implement properly, let's wait and fix the core issues first. At least that is my take.

*systems that aren't working as intended because people found ways around the mechanisms, breaking them, leaving them pretty much unused.

Fortis88
Posted - 2011.07.21 01:16:00 - [46]
 

bump it. support it. love it.


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