POLL: Should companies should be delisted if one person owns all the shares

[beamthegreat]

Given that it is now possible to privatize a company, if 100% of the shares of a company is owned by 1 person, should the company be delisted and automatically changed to a private company?

[Kristo]

My opinion is "No". The choice should always be the player's.

Between "private company" and "public company where all shares are owned by 1 entity" there is a huge difference:
1/ the game can charge a fee for a company to switch to private/public, for example - $500 000; switching shouldn't be somethinc cosmetic, or something that a player will do all the time, just for fun, it should be a strategic move with huge changes.
2/ A private company can "hide" specific details about itself - profits, income/expenditures, strategy, owned-tech, etc, as those are not meant to be disclosed for possible/existing investors. Public company must disclose a lot of things. In a public company there's a duty from the management to the investors to disclose everything, even if the CEO is the only investor.
3/ Private companies are not traded on the stock market by choice (in game: player's decision or strategy), public companies - are, even if the owner does not want to sell right now, he/she may need cash later, or may need to issue new shares or buy back its own. The strategy in play is different. Also switching should bring different style of playing the game, as several new things become available. Private company can not issue shares.
4/ in some legal systems, certain type of companies must be public, mostly because of regulation. In game - it makes sense for a tech-startup to begin as a private company owned by 1 individual, then go public, because it needs cash and so on.
5/ in some legal systems, you must pay taxes for all the "papers" you own - shares, commodities, futures, insurance policy, bank accounts, even tech (patent) owned. Basically paying taxes for owning your own company. In a private company this won't happen, as there are no "shares" to be "owned".

Also - a "private company" is great for owning and running as subsidiary, focussing on specific niche sector, and not listing it on purpose, so it's value is not important and hiding all possible details from competitors

[buells]

The real world situation is that a company that is 100% owned by one entity or even by a limited number of large holders would be delisted. The reason for that is because there would be no liquidity in the stock, no active market to determine the correct price. That's why companies sell significant shares in an IPO, which creates liquidity in the stock. Companies do not have the luxury of having almost all of their stock be closely held while still having ready access to public markets. Realistically you probably need at least 10% of the market value to float. The reason companies have to issue shares at a substantial discount in an IPO to their expected public market value is that in the absence of a liquid market for their securities, the price at which the securities would trade in such a market is highly uncertain.

[nejxis]

The real world situation is that a company that is 100% owned by one entity or even by a limited number of large holders would be delisted. The reason for that is because there would be no liquidity in the stock, no active market to determine the correct price. That's why companies sell significant shares in an IPO, which creates liquidity in the stock. Companies do not have the luxury of having almost all of their stock be closely held while still having ready access to public markets. Realistically you probably need at least 10% of the market value to float. The reason companies have to issue shares at a substantial discount in an IPO to their expected public market value is that in the absence of a liquid market for their securities, the price at which the securities would trade in such a market is highly uncertain.

Adding to this, currently the game doesn't differentiate between companies that have regular trades and no trades at all.

Most companies in game, end up with the CEO owning all shares at one point, but the price of the shares still go up and down, which is obviously never going to happen in real life as since no trades are done, how can the price change?

Same thing with those companies which have no public shareholders left and only local companies, that trade between them.

I believe there should be either a capping on the amount of shares a person / company can own, for example 80% and then a pop up comes up asking if you want to acquire the remaining shares to make it a private subsidiary.

the only company I know of that is on a stock exchange in real life with very little float is Suadi Aramco, but since it's so huge, there are still tons of trades a day.

[buells]

Yeah, the dollar volume of float (shares held by the public) is the most relevant measure for equity market liquidity. Companies with larger float tend to have more trades, more equity research coverage, more market makers, and smaller bid/ask spreads.

[ohms_law]

I voted "yes". I thought we already talked about this?

It's annoying and frustrating to have AI companies that are 100% owned by the CEO.

Can't the AI be programmed to issue more shares? It should always be possible to buy out AI companies, in some manner.