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How to fix the scam company loopholes?


David Archer
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So a BUNCH of companies are getting IPO'd with no assets and then the owners are bailing when the stock goes up.

I propose a fix for this would be to have certain actions perform an automatic appraisal of the company including obtaining a loan, IPO'ing stock, or issuing new stock. There are already fees charged for these actions so the appraisal can just be bundled in to the existing fee structure.

Anyone else have good ideas for how to fix this stuff so we don't have a ton of scam companies cluttering up the stock exchange?
Ay Vee
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I like this idea much better than the one being floated in the market discussion forum.
Scott (Admin)
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perform an automatic appraisal of the company including obtaining a loan, IPO'ing stock, or issuing new stock. <-- that's been done from the start, well, aside from the loan.
David Archer
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Ok cool, I wasn't sure about the IPO and issuing stock part. Delayed NW calculation with 50% loans is the broken mechanic here. It makes sense that the bank would want to see an appraisal before loaning out a bunch of cash.
Mister Death
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I don't play the stock market side, so I ask naively: Is this a scam that a single person can perpetrate, or are they making money off the punters who buy into the IPO? If the latter, the solution is obvious - don't buy the fricken shares.
Lorenzo Boccaccia
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There is a default buy from fake company at ipo day, representing 'the public'

After all, there is no such thing as a non owned share: you need a 'public' actor to abstract buying and selling
Lorenzo Boccaccia
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So: here are some random ideas, may be used alone or alltogheter and arent that much gamey

Base max loan on previous day revenue

Add a share market which works like the b2b but with price fixed at +-5% of share value

Remove cash from market cap calculation, use equity

Add a wait time for building dismantling

Use building sale price for market cap and not purchase price

Use wholesale value for items added to market cap




Mister Death
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In real life IPOs can be undersubscribed, no? Unbought shares revert to the chairman. Problem solved.
Scott (Admin)
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In real life IPOs can be undersubscribed, no? Unbought shares revert to the chairman. Problem solved.

That is the plan on the todo list.


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