Bilking the investors and bond financiers loophole

[glennchan]

I recently discovered an abusive strategy in RT3...

(Pause game.)
1- Start a new company. Get as much investor money as possible.
2- Issue all the bonds that you can.
3- Issue stock twice.
4- Personally buy as much stock as you can in the company. If you have a reasonable amount of purchasing power, you will cause an 'upward spiral' where the stock price keeps increasing and your purchasing power keeps increasing.
5- Get the company to buy back as much stock as possible.
6- Sell off all your stock.
7- Resign as chairman.
8- Feel free to sell the stock short. (Only thing to worry about is a short squeeze.)

Basically using the company's money to buy back stock will cause it to go abnormally high. So you buy low and sell high and make a lot of cash.

*On some scenario maps you will lose if you are not the chairman of a company. So simply start a new company to avoid that.

Eventually investors will trust you less and give you less money when you startup new companies. But they will still give you 50% of what you put in. And you can raise about $1.5 million in bonds.

Personally I feel that this is cheating and should be avoided. But theoretically it might let you win particular scenarios in a few months?

2- A similar stock market strategy is to sell off all your stock, destroy all of the companies' assets, and then leave as chairman and sell the company short. This is the work of a true robber baron.

3- Other things to do with other people's money:
A- Buy access rights.
B- Setup your own company (100% ownership) that lays track. The second company (90% other people's money) would run the trains. The company that owns the track makes the money.
C- Build dud industries so that you can buy them back cheaply. e.g. if there is a concentration of logging camps (but no lumber mill), build a furniture factory and a toy factory there (upgrade them if necessary). They won't make money without lumber.
Come back to your own company, buy the industries and build a lumber mill there. (Cha-ching.)
D- Merge with your companies, paying too much for the stock.
E- Bulldoze cities that other companies run track through.

[Gwizz]

Basicly the same thing can be done in RT2 short of building industries.
This is tycooning and for this game in IMHO it is not really cheating.
In real life it could be called cheating.

[glennchan]

It might as well be cheating since you get infinite money (or at least lots of free money in zero amount of game time). No?

2- IMO you should self-impose a rule of thumb in that you shouldn't do anything to intentionally hurt the company or that would be a conflict of interest. In real life, you'd have a board of directors that would disallow such actions and there are/would be laws against it.

This also stops you from getting infinite money.

The company shouldn't buy back excessive stock so you can sell your own stock afterwards.

[Silverback]

The game is railroad tycoon and in real life some of the early tycoons did do this sort of thing and bent the law too! It is an exploit in gameplay though.