Converting to Ten-Share Companies

A fair amount of my recent testing has looked at the process of converting companies from five shares to ten shares. Converting gives the company more capital, more station markers and a higher train limit, but halves the income from each share. So the director has to make a trade off between owning a more effective company or keeping a higher percentage of a company’s shares. The questions are, how this should affect the share price, and how much money should it give the company.

At first, I halved the company’s share price when it converted, reflecting the fact that each share now represented 10% of the company’s value instead of the 20% it did previously. This didn’t work in practice. It made the shares too cheap to buy and their value quickly increased thanks to the multiple jumps from a high dividend. Players ended the game with too much cash that they couldn’t spend. Also, the company didn’t get much extra cash from the halved share price, which made converting less worthwhile.

So I looked at what happened if the company’s share price is unchanged by conversion. With this approach, the number and cost of shares available works out much better. However, this also gives more money to the company, to the extent that it seems too easy to buy the expensive trains and even have a little left over for tokens. I could increase the cost of trains to compensate, but this would effectively eliminate the option of withholding income instead of converting.

One option would be to make the money coming into the company be set by its original, initial, share price instead of the share price at the time of conversion. This is what 1880 does. However, this would remove a trade-off. As things stand, a director has the choice on the one hand of converting early, to gain markers and key routes, and on the other hand of converting late, to get more money into the treasury. I like to have more decisions in the game and having a fixed amount of money arising from conversion would shift the decision towards converting early.

Currently I am experimenting with dropping the share price by two spaces when a company converts. This reduces the amount of money it receives and inflicts some cost on the director’s share value. In the first run through, this seemed to work OK. I'll do a few more tests and see how it goes.