Stock market rigging/ racketeering

Post here if you have any strategy tips to share
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torpedo_1
Posts: 9
Joined: Wed Jan 28, 2015 9:23 pm

Stock market rigging/ racketeering

Post by torpedo_1 »

3 Objectives of this Strategy:
1. Make money; 2. Circumvent in-game SEC regulation; 3. If you do this in real life, you go to jail. (Do what you can't do in real life)

SEC regulation:
It prohibits buying of a company's shares (target company) by your subsidiaries, if you personally or through the mother corporation (ultimate mother corp.) already hold that stocks.

Strategy 1 - Circumvent in-game SEC regulation
Never hold the target company's shares personally or through ultimate mother corp., use a wholly owed subsidiary. Use other subsidiary controlled by you to buy the target company's shares from one another. The transaction you created (between your subsidiaries) will jack up the target company's share price "to the moon". After reaching a desired level, all your subsidiary pull out and sell all of the shares of the target company, all your subsidiary profit greatly.

Strategy 2 - Ultimate mother corp. taking profit
Now all your subsidiary have loads of cash through strategy one, but their share price do not immediately reflect the cash earned. Use your mother corp to merge with one of your cash cow subsidiary (if it's not wholly owed by you, you can pay cash to buy out the other shareholders). Now you have a lot of cash.

Strategy 3 - Squeeze out other minority shareholders in your company/ subsidiary (fraud against minority shareholders)
When you have super majority holding (75%) in a good company with brands and running business, it may be costly to buy out other minority shareholders. Dilution effect by issuing shares to holding company (or the public and then buy back) also has its limit. You can create an empty company shell as an SPV, jack up its share price to 80-90% market capitalization of the target company (using strategy 1) (must be less than 100% so that this SPV can be merged into the target company). Control your target company to merge with the SPV, issue shares to the SPV shareholders (which should be 100% controlled by your holding corporation). Suddenly, you force a round of issue shares to buy this expensive (but worthless) company shell.

Strategy 4 - Misappropriating company funds and control the share price indirectly
Create a profitable business and sell (at most 25%) of its shares at high price. Use warehouse ridiculous pricing to divert profit away from that business, make donation, buy expensive useless tech from you etc. When company lose money and share price drop, buy back shares at lower price.

It's a good game to study market misbehavior. I hope these method are not all banned by game admin. :D
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