Capitalism 2 and Capitalism Lab Forum

Save Game: http://1drv.ms/1NPpLIQ [Latest Patch of the Beta]

The Media company Beta which is a subsidiary of my company stock is often drops to like $9 or below when the company is worth $13.50. This has allowed me to acquire shares at a very affordable rate but I don't understand why the stock is dropping. There's very little volume, no major sells, the stock will just go from $13 to $9 even though the operations are pretty steady. Is this a bug or is there's some logical for which I don't understand?

I believe stock prices are often priced according to their potential profits, this is what the P/E generally represents.

If a stock has a high P/E it means people are essentially investing in the companies future profits.

A media company or real-estate company would have very little potential growth, and typically rely on dividends.

In real life SEC requires REITs to pay 90% of their taxable income to shareholders,
if you want the stock to stay high you might have to set dividends to about 90%.

Not sure how it works in the game, but this would make the most sense to me for game logic

This a very old post, but I think some underlying mechanics are still the same. Even without any transaction and even no assets changes, the stock price might still vary due to two factors:

1. A random up and down cycle changes daily, and big jump up and down around a steady level monthly. I think it can go up and down about 20% to 30%, like a base $10 price stock can go as low as $7 and up to $12 more, but usually stay around $9 to $11.

2. A major shift of the base P/B ratio changes due to economic status (if economic realism is set to High), it can goes to pretty low like 0.6 or 0.5 times of the normal in deep crisis, and go up to 2.0 even 4.0 in economic boom.