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Stock Market Question

Topics: Beginners: Stock Market Question

Will Walker

Tuesday, October 29, 2019 - 04:54 pm Click here to edit this post
Andy recently said that loans don't get defaulted, which has me puzzled about something:

When a public company with no majority shareholder goes under due to debt, where does the debt go? Is it doled out to the shareholders according to their % of ownership? Does the game assume it and just pay it out to completion?

John Galt

Tuesday, October 29, 2019 - 09:51 pm Click here to edit this post
I would like to know the answer to that too. I do not know either.

Vladian Enache

Tuesday, October 29, 2019 - 10:43 pm Click here to edit this post
like in real life sometimes banks eat the losses

Will Walker

Wednesday, October 30, 2019 - 04:17 pm Click here to edit this post
Vladian Enache: Are you saying that because you know, or because you think?

I'd like to hear Andy weigh in on this.

Will Walker

Wednesday, October 30, 2019 - 08:27 pm Click here to edit this post
To test this, I closed two corporations that were public but I had control over. (Neither was profitable anyway.) One had 28B in cash, and 90B in debt.

The other had 9B in cash, and no debt.

I received neither the cash, nor the debt. The in-debted one I was 70% majority shareholder of. (Don't worry, the shares cost 0.07 SC$, it was a cheap experiment.)

It seems that debt and assets of a public corporation simply vanish. I'll be posting a suggestion about this, since that's neither realistic, nor fair given that a plurality shareholder can simply erase people's wealth.

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