' Wrote:My position was that buying out ownership/control of the facility and the ownership/control over the material/political worth it represents for such a pathetic fee is laughable. That is the core of my derision. The sum you offer up of a billion credits as the worth of all that is exactly the sort of thing that makes me shoot cognac right out my sniffer.
This is where everything starts to fall apart, where the paint starts getting mixed. I'd find it lovely if maybe you could state the actualities of things rather than expressing what you perceive as how they aren't.
So this is what I'd like you to do.
A) State the total worth of the Detroit Munitions company.
B) How that compares to the stated worth of stocks.
C) What holding a majority shareholding of stocks means.
A.) In static assets, it is worth 4,271,000,000. Add in liquid assets (includes money, production materials, and post-production products yet to be delivered/sold, as well as the relative value of all currently held contracts) and it's be roughly 5.7-6.7 billion.
B.) Total stocks are worth 850,000,000. Stocks do not equal total value of the company's net worth for reasons stated below.
C.) Majority Stockholder can set policies and decide all general operations of the company. He/She has final say on what the company does and how it does it. He/She cannot, however, take assets or money from the company for him/herself. You can compare it to a faction leader in this respect. While they can tell their members what to do and how to do it, they cannot call their member's assets their own. They can't take a member's transport, sell it, and keep the credits for themself.
Dusty Lens Wrote:If the deal were presented as, say, limited access rights to Ageira weapon schematics and production facilities on Detroit which you leased for a period of 5 years for the price of 800 million I would nod my head and go "ah ah, jolly good. Way to turn your millions into more millions. Yeye."
This wouldn't happen for one very good reason; Ageira and Detroit Munitions (the company which is a vanilla entity, see infocards in link of first post) are a partnership. Ageira designs fighter weapons [Vengeance/Magma Hammer lines], Detroit Munitions builds them and handles any weapons contracts for the partnership. Detroit designs its own Light Arms. Access rights to Ageira weapon schematics and production facilities is a part of a partnership that already exists between those two companies. The CEO is not who holds those access rights, the company does. Much like investors "buy" their way onto the board of directors of companies by giving a bunch of cash, this is the exact same, except that there is only one director, not several (sans IND, who is a share owner, but does not hold a majority, and thus cannot overrule the majority shareowner's decisions).
I'm also getting the feeling that you are putting Detroit munition's worth higher than it truly is. It's a very successful (infocards) company, and handles a large amount of business, but it is itself actually quite small with a fairly modest net profit. I did not buy a megacorporation. I bought director rights to an arms company.
An arms company which manufactures the weaponry employed by every man, woman and mounted on every piece of hardware utilized by the military, navy and law enforcement in addition to the small arms of her civilian population in addition to foreign sales is the very definition of a mega company. One which produces the weaponry of the largest and richest of the four principle colonies.
For goodness' sake. Just the other day you employed Detroit to slack Bretonia's demand for war machines during her time of open conflict (given that she's currently cut off from Rheinland support following her gift of weaponry to Liberty yadda). I fail to see how being able to provide that kind of a high five suggests a humble business concern.
Which is now being run by a mercenary who bagged a hundred Xenos and hopefully took a business course at the local community college, but I digress.
Your numerical figures for total worth would likely be closer to an ideal number of total sales across a fiscal period.
I believe it's far more plausible that you're vastly underestimating the worth of such a company. Your own description of what you do defies the concept of a humble business concern. I likewise reject the idea that the director of Liberty's flow of military hardware can be purchased for such a mean sum.
But I suppose it's all moot and, well, it's just a story. But one which I hope you'll consider re-evaluating.
Also I missed where you explained why the stock value of the company is so much lower than its broadcasted worth, or why its director's position can be purchased for such a mean sum. Lord knows if I was sitting on top of an easy job, like, owning a monopoly of arming a nation at war and supplying another while making sure every drugdealer in the streets had something to shoot someone else with I'd likely hold out for a slightly higher buy price.
First, my character owns the company, but, while she could, she doesn't put her hand in the pot very often. I'm roleplaying currently her being personally involved only in the new security division being made to protect the equally new trading division, which has all of one 5k and a few Mammoths in-RP currently. So her being a former mercenary doesn't matter in the running of the company. She bought it as an investment, not to take over. That is why, if you see my posts as the company, they come from others on the staff, usually the VPT (for trade notices), CFO (for contracts and deals), or COO (for everything else). The COO practically runs the company, hence his title of Chief Operating Officer. It is not uncommon for a CEO to take a minimal role and only get involved on large-scale decisions that drastically alter the company.
And my mercenary did a bit more than "bag a hundred Xenos". If it was nothing but a simple mercenary I wouldn't bother making an RP this complex. The character has a lot of history to it, a lot of roleplay to it, and is not a simple mercenary. Please read the relevant links at the top of the thread.
Also, while we provide the construction of Liberty's weaponry, we do not get to pocket all the cash. For one, there is production costs. Two, the percentage that goes to Ageira, who did design the guns and owns the Liberty Navy contract afterall. Three, the costs of shipping, as Universal handles most (and until recently, all) shipping for Detroit Munitinos. I think you're overestimating profits here. I'm in the midst of studying for a business administration degree right now, so I do know what I'm talking about. There is a lot of hype over how much gun manufacturers make. It's really not as high as most people think. The arms companise that make tons of money are the ones that design the best weapons and vehicles. If I remember correctly, Lockheed Martin recently became the biggest arms company in the U.S. (but what I read may have been outdated). Why? Because they design fighter jets, warships, weapons, etc. High-tech, highly-expensive goods. Detroit Munitions builds vehicles and light arms, yes. Vehicles in vastly smaller amounts. We also build starfighter guns.. Guns designed by another company that takes a large percentage of the profits from its sale. We do not design, build, or sell starships, which would be the Freelancer equivilent of fighter jets and warships.
Detroit Munitions is large than most Liberty corporations, but it is not nearly in the same league as Ageira, DSE, or Universal.
As for my figures for total worths, there is actually a figure for total sales. It's far higher than my total worth. But so is the total expenses in making the products we sell. The net profit from it is not so high.
You're also vastly overestimating the amount of money the CEO would get from the company. He does not get all the profit the company makes. The amount of money he received, all at once, will allow him to puchase just about anything he'd want during his retirement. This allows him to have the money he would've received after several decades, all at once, and also be free of the demand the company would make on his time. This type of acquisition is not uncommon in the business world. Especially among people who inherit a company they don't have an interest in running.
As to why the stock is worth less than the company's overall networth (also something not uncommon), that is due to a number of factors. One being the lack of competition. Since Detroit Munitions is not a publicly traded company (as said by the vanilla infocards), there is no competition to buy or sell its stock. That means stock prices do not fluctuate, and also do not rise. Buying of stock increases that stock's value, as does events happening to the company and the company's yearly success. Since there is no public trading, yearly success, events, and price fluctuating are no longer the factors that affect it. Stock price is determined by the current stock holder(s). When/If he decides to sell his stock, he, and his buyer to a smaller degree, are the only ones who decide that value. Stock itself is a company asset. It can be sold and traded for money or deals. Stock is a form of ownership and control. Those with the most stock have the biggest say in how that company is run. In a privately-traded company, that makes stock's role err on the side of control, and not on the side of dividends or asset handouts in the case of liquidation.
To calculate the value of that stock, I started with the question of "How much money is the director's seat worth." In companies with a board of directors, the currently existing directors are the ones who determine, between each other, that value. I then factored in the yearly profit the director would make. This is written on my site somewhere. It's not an amazingly high figure. Most money the company makes is put towards making more money. The CEO's "salary" is determined through the shares held, and then the total shares is given a percentage of yearly net profit. Right now that percentage is just under 4%. That makes each share worth 900c. Total of 100,000 shares, that's 90 million yearly. That means 10 years would've had to pass to equal the money the former CEO received. And these are during the good years, which may not be lasting much longer if the rumors about Gallia are true, or if either war ends. Considering Leeds is at a Stalemate and Liberty and Rheinland are doing only minor fighting, the wars appear to be drawing to a close, or at least a lull, where the company stands to lose some of its profits, and with it, some of the director's yearly income. Currently this has my character making 54 million per year. IND making 36 million per year. 6 years for my character to regain the money she spent, if things continue as well for the company as they currently are (iffy if the blockade lasts and fuel starts becoming a major problem in Liberty). 11 years for IND to make back what it spent, with the same circumstances.
In short, now would be the best time for the former director to sell off his seat, as he can demand a higher price than he would be able to at other time, meanwhile that lump of cash sets him for life regardless of political advancements or war statuses.
Keep in mind, in-game eceonomics are fairly skewed. They are geared towards getting money to people transporting. Production is not really set up properly in this game. Since flying spaceboats is what we can do, flying spaceboats is what the economy is centered around. Realistically, those large transports who drag 5,000 GU of commodities around Sirius are costly to replace when blown up by pirates, are costly to keep running through maintenance, fuel, and crew costs, and the profits don't all go into the pilot's pockets, but into the corporation's pockets, which then pay for fuel, maintenance, and crew. There is also the issue with the fact that realistically, there wouldn't be infinite trade routes to run. Eventually bases would have more of a commodity than they need, and won't pay for us to keep delivering more of it.
In setting this up, I tried my best to imagine how a galactic economy like this would really work (ignoring the obvious physics issues that'd prevent it..), and how money would really look like, rather than the hyper-inflated form it is in-game, where the trade captain works for no one, doesn't pay for fuel, doesn't pay his crew of slaves, and pockets every bit of money that comes his way.... While having a ship that can blow up and magically respawn without any loss of money except cargo. >.>
If you feel that another figure makes more sense, please give me some examples, preferably in forms like those on my site, such as yearly sales, yearly expenditures, net profit, etc.
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