by Lou Jerkich, 10 April 2000
All players making their investment plans for the First Stock Round should consider three key factors. These are the train types available, the number of starting companies desired, and the location of the starting companies.
In regard to train types, let us consider by way of example a mix of trains that would be used for five players. At game start the type "2" trains available would include 4 Station trains, 3 Mixed trains, and 1Yard train. This train mix has great bearing on your initial decision as to what company or companies to purchase. In the early game, trains that run solely to Yard tokens are rare. Among the type "3" trains, the mix for five players is 3 Station trains, 3 Mixed trains, and 1 Yard train. With type "4" trains there will be two of each kind of train. Thereafter the number of Yard trains equals or exceeds the number of Station trains, while the last Mixed train is a type "5," and there is only one of these.
Consequently, early in the game companies focused on passenger operations (Stations) will have less difficulty obtaining a suitable train than those whose focus is freight (Yards). A player who starts the game with a company that has only Yard tokens (such as the D&H or the B&LE) had better be sure his company will be the first to operate, for if he cannot obtain that Type "2" Yard train his company may have to buy a train it cannot use, and thus it will gain no revenue. The owner of a company having both Yard and Station tokens will be able to determine what Yards or Stations to place based on the train(s) he will have available for purchase. However, remember that each company has a particular type of token for its "home" location. If the only trains available during your turn are Station trains and your home location is a Yard, you might have a problem. This applies to the reverse mix as well. After all, if you start an isolated railroad whose home location is a Station, and whose only train purchase choice is a Yard train, you may well wish you had started the D&H instead! For the start of the game, therefore, companies having both Stations and Yards thus tend to be a bit more flexible, especially because of the availability of Mixed trains, but there is generally some risk involved for all players.
The game is designed so that there are several ways to get railroads launched at the start. You have sufficient cash to buy one or two companies at game start. Although par values can vary from $150 down to $77, if you are buying only one company you might just be better off buying at either 150 or 77.
The former gives you one strong company not easily taken over. On the other hand, if you buy at par $77 you can buy up 100% of the company and it will rise three steps on the stock chart (at 80%, 90%, and at the end of the first SR). That would put it at a share value of 95. In the first Operating Round you would have sufficient cash to pay out dividends + 200%, which moves the stock value two spaces to the right, to $112/common stock. In the next stock round you can dump 50% of the stock and perhaps up to another 20% if the corporation will buy back its own shares. (It may hold up to 25% of its own common stock.) This gives the player enough cash to buy another company in the second SR at a par 150. However, the original company will drop .5 squares, rounded down, for every common stock certificate sold, thanks to having paid dividends plus 200%. Thus if five common shares were sold the drop would be two spaces, taking the company down to $95/common stock. [Note that the stock marker token does not drop or rise per se with sales or purchases of preferred stock, which forms 50% of a company at game start.]
The second company described above cannot merge or be taken over during its first Operation Round. In Operation Round #3, the second company should be in a position to make a friendly merger with the first company, whose stock value will have been lowered by the stock dumping to a level more easily bought out.
An alternative is to start two companies on the first turn by buying stock in one, then dumping some shares and buying stock in another, all in the same first SR. Such companies might start at 122 and 95 par, for example, or any of a number of variations on the spending of the $800 with which each player begins. If you start a company and dump the "common stock" before you have run it for any revenue, you will drop 2 squares for each share sold. A drop of 10 spaces for the sale of five common shares bought at 77 par takes its value down to 48 per common stock. This is only three spaces from being closed out, and it is so low that this company is a very easy target for a hostile takeover. Consequently, those wishing to start two companies on the first round might buy only preferred stock in the first company, then sell 20-25% of it to gain sufficient cash to buy all the preferred stock of one's second company.
Finally, another way to invest is to buy wholly or in part into companies run by other players. This may work to your benefit sometimes, and it may help or hinder your opponents' plans, depending on what they hoped to achieve.
It may be in everyone's interest that lots of companies are started early so mergers can occur. Not only are systems much more profitable for their owners, but they can lay 7 tiles total, with a limit of 5 city upgrades and 6 token placements. It is hard to win without being the President of at least one system. However, another player may foil your plans by investing in your company's stock, so you can't recover all the cash you hoped for by dumping some of that stock. He might even sell before you do, thus lowering your potential return for dumping the stock. Then again, another player may try a takeover on your original company before you get to do your own friendly merger. You must start both companies you hope to merge near each other so that a friendly merger is possible, but what if someone buys up that ideal 2nd company before you get your own opportunity to do so? One takes a chance (speculation?) when starting a company with low par value while counting on it to be part of a merger. Events may get out of control. Thus the game has some checks and balances on the unbridled accumulation of wealth.
The other significant factor at game start is the location of the starting companies. There are three or four areas of the map where revenues can be expected to be high. New York City with its potential for a great commuter run is the most important of these. Cleveland is another place with lots of potential, especially because track-building costs on the Ohio plains are low. The Baltimore-Philadelphia area and the Boston region are also capable of producing significant revenues. Although Buffalo-Rochester also seems to have potential, unfortunately few railroads start in that area of the map, and none are major corporations.
Each player must decide where he wants to run a railroad, and then which one in that region he should run. There are risks involved with these choices. Neighboring companies will compete with you for the limited number of stations and yards in the chosen region. The larger and better-financed companies always pose the threat of hostile takeover attempts against near neighbors, but they could also become your victims as well. You must decide whether or not you want your first company somewhat isolated to avoid hostile takeovers by competitors. On the other hand, you may wish to benefit from track laid by others, or have good opportunities for takeovers of competitors, or perhaps hope to obtain track rights from your neighbors. Whichever decisions you make, none are without risk.
To sum up, the decisions as to where to start your company, and which one to start, are closely tied to your expectations of being able to obtain a suitable train for your company. If you are not among the first few players to purchase, or if you will be purchasing more than one company, those later companies should probably have both station and yard tokens in order to have more flexibility in train purchasing. Remember that all mergers and takeovers require the track of the two corporations involved to be connected, so if you want a friendly merger don't start companies as far apart as, for example, the C&O and the Maine Central. This means that you should think in pairs if you want to start two companies, and make contingency plans accordingly.