| Sunday, January 31, 2016 - 03:44 pm |
I am trying to IPO a corporation with a market value of more than 500B and with a P/E ratio of 23.4. The first 15% of the shares is offered for sale, but after several months nothing is sold and the corporation automatically becomes a state-owned corporation again. I tried to IPO this specific corporation several times, even with offering the shares below market value, but none of the investment funds was willing to buy the shares. And this while there was high demand for corporations with a much higher P/E ratio.
Are there any factors that I am overlooking?
Thanks in advance!
| Sunday, January 31, 2016 - 04:36 pm |
It isn't possible to locate information you are overlooking since you didn't provide the name and location of the corporation. Without that, we are limited to the information you posted, which you are correct in saying does not offer an answer to your question.
| Sunday, January 31, 2016 - 04:54 pm |
Country: Republic of Selene
Planet: Kebir Blue
Corporation: Phalodian MS SA
| Sunday, January 31, 2016 - 10:08 pm |
I believe you are falling victim to competition. I know other players in the process of selling shares on your world. Reviewing your country, you have taxes and profit sharing at 12%. To ensure shares sell, most players selling shares will temporarily drop these values to zero. In doing so, their shares will sell before yours.
Also, the supply quality of that corp is low, with an average that would appear below 200. This is causing a lower quality product to be produced which affects sales. Consider raising this average closer to 210.
For some numbers, I will compare a similar corp that I happen to plan to IPO soon, on the same world and produces the same product.
Santa Emillia Military Service
Market Value 503,921.52M SC$
Products Sold 3,476.40M SC$
Profit Last Month 947.59M SC$
Net Profit Last Month 947.59M SC$
P/E Ratio 21.3
Salaries Paid 801.96M SC$
Phalodian MS SA
Market Value 496,027.44M SC$
Products Sold 3,104.62M SC$
Profit Last Month 957.38M SC$
Net Profit Last Month 791.95M SC$
P/E Ratio 23.4
Salaries Paid 641.60M SC$
I threw in one more stat on paid salaries since these are state corporations. I make a choice to pay higher salaries which cause profits to be a bit lower but have other benefits for a country. My higher quality supplies allow a higher quality product to be produced. This results in me selling $370M more in product while paying a bit more for supplies and allowing $160M more in salaries to be paid to my workers while only resulting in slightly lower Gross Profit than your corp.
My lower taxes causes my Net Profit to be higher and, as a result, my P/E to be lower. This means my corp will be listed higher on the share market and will sell shares before yours in any share offering.
| Sunday, January 31, 2016 - 10:21 pm |
Thanks for the answer, this clarifies a lot! :-)
How does it come that last week I had no problem selling all the shares of corporations with a P/E ratio of over 30? Could it be the quality of the products?
| Monday, February 1, 2016 - 02:46 am |
Remember what I started with. You are dealing with competition. The presence of competing share offers can vary.
| Monday, February 1, 2016 - 07:15 pm |
Thanks Aries :-)