Just wondering if there is a reason why publicly traded companies do not have the ability to issue new shares to raise more capital. Currently IPO's raise a very limited amount of capital from other players and the controlling player can inject more capital into the traded company but has little insentive to do so because that gives free assets to the other players.
It seems like it would make gameworlds a lot more vibrant if giant old airlines with billions are able to seriously invest in new start ups, it would be good for new players that have good business model and good for legacy airlines that have nothing else to spend their capital than on terminals and purchasing aircraft, both of which are pretty unproductive in my opinion.
Issuing new shares would match all those billions with market opprtunities. Unless it is seen as opening the possibility of cheating? Which I don't see how yet.
I actually don't think that giant monopolies that change little over the years is good for the game. We need to work out how to make the market more dynamic. In the real world every company constantly has the threat of new entrants that can discover how to satisfy the market better.
As a side note does anyone know of any recent cases in old servers where a new start up has taken on an old established airline with most of the slots and won? It seems impossible.
Sounds like a good idea. the only problem i think people may run into is when you add shares, the percentage of share for previous shareholders will change. and it might have traffic right problems when you have two airlines in two countries just barely balance the share to keep the airline has one specific traffic right, unless the public compnay can actually decide who can invest the new share
As a side note does anyone know of any recent cases in old servers where a new start up has taken on an old established airline with most of the slots and won? It seems impossible.
Nah, I haven't really taken up that many slots and still have about 60 A320s and A319s that are not flying and a billion in the bank (now split up among my other companies). I would rather give this airline as an example. He is a great friend and a student, I mentored him with his previous airlines and I have offer him very cheap leases. Now he has himself become very good at the game and has a perfect understanding of it. He took over 50% of the BKK market in about 2 months after Thai Wings liquidated (run by Finavia who was one of my mentors, the other one being YB).
When a company issues additional shares, this reduces an existing investor's proportional ownership in that company. This often leads to a common problem called dilution. The end result is that the value of existing shares may take a hit. This is a risk of investing in stocks that investors must be aware of.
I think the existing shareholders should be given rights to buy new shares before offer it to the market. Usually called 'Right Issue' if I'm not mistaken. By google: A rights issue is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital.
Also the corporate action should be approved by majority shareholder in a shareholder meeting. So it could be quite complicated to implement.
Currently IPO's raise a very limited amount of capital from other players and the controlling player can inject more capital into the traded company but has little insentive to do so because that gives free assets to the other players.
I don't think you could transfer asset without compensation from/to publicly traded airline. Or any other way that I am not aware of? lol.
I actually don't think that giant monopolies that change little over the years is good for the game. We need to work out how to make the market more dynamic. In the real world every company constantly has the threat of new entrants that can discover how to satisfy the market better.
As a side note does anyone know of any recent cases in old servers where a new start up has taken on an old established airline with most of the slots and won? It seems impossible.
unless the giant is sleeping or lost appetite (and eventually credits) to play, I don't think it would be possible. But hey, David did kill Goliath. You need faith though.
Yeah it dilutes % ownership but not in terms of value because the value of the company increases. Sometimes it's better to own a little bit of a huge thing than a big bit of a little thing.
Anyway, they could just implement that shareholders with 30% or more are allowed to veto the new shares issue and shareholders are the only ones that are allowed to subscribe to the new shares for the first 3 days or something like that. Not that different to the mechanism already implemented for IPO's.
I don't think you could transfer asset without compensation from/to publicly traded airline. Or any other way that I am not aware of? lol.
you are for sure allowed to transfer assets without compensation to a publicly traded airline. Just not 'FROM'.
It isn't possible to even transfer without compensation from a public company to a 100% owned subsidiary. I think you should be able to but the system won't let you. I was planning on starting a sub leasing company from my public company but no can do.