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Neopia's Fill in the Blank News Source | 22nd day of Awakening, Yr 22
The Neopian Times Week 142 > Articles > BOOMs Big Bang

BOOMs Big Bang

by sparky63428

STOCK MARKET – Boom’s recent bang from the stock market has shocked many in the world of Neopia. Their loudspeakers had been well known in the world of Hi-Fis since they opened for business. The company of Boom Boom Boxes has been quite successful, so what happened that made the company explode?

“Due to a corporate scandal and accounting irregularities, Boom have filed for bankruptcy.” That’s all the information we got about the bankruptcy. There seems to be no sign of the president or vice president of Boom. Perhaps they had fled to avoid questions being thrown at them. To find the answer, I went over to Northern Stock Analysts and asked for a bit of information.

With pen and paper ready, I stepped into the building.

“Umm…excuse me,” I asked a Zafara at the reception desk.

“Yes?”

“I am here to find out why Boom went bankrupt.”

“Well, most of the employees here are experts on this sort of thing. Just wait, I’ll find someone who’s not busy at the moment.”

***

“Hello, I’m Kyrii Donkey. I believe you wanted to know about Boom’s recent bankruptcy?”

“Yes. I’m Sparky, and I’m doing a report for the Neopian Times and I just want a little bit of information about it,” I replied.

“Well, follow me.” The red Kyrii led me out of the room. I followed him into a large research room, where dozens of analysts were doing research on the stock market and economy. He gestured me into his small office.

“Would you like a drink?”

“A Fundus Fruit Tea, thanks!” I sat down, looking around his office. The walls were covered with charts and stock information. Kyrii returned a short time later with the tea and a cup of coffee for himself.

“So you would like to know about Boom’s bankruptcy? Why and how it went bankrupt, perhaps?”

“Yes, thanks.” I got my notebook and pencil ready and waited for him to begin.

“Boom’s sudden collapse was a shock to all of us. The founders declared bankruptcy, closed the company down and disappeared. The only information we got was that there was a corporate scandal and accounting irregularities. We here at Northern research wanted answers, so we caught up with a few former employees and senior staff of Boom.” Kyrii sat back in the chair and sipped his coffee.

He continued: “The former workers weren’t much help – they were as clueless as us! They told us that they were sacked in large numbers days before Boom declared bankruptcy. The senior staff gave us a better explanation. But before I move to that, I’d better tell you about Boom’s past first. When Jason Mynci founded Boom, he had revolutionised a new market – Hi-fis Their Megablaster 5000 was among the best, if not the best, Hi-Fi there was. They took year 3 by storm and Boom’s profits skyrocketed to about 250 NP a share. After a while, a few Neopians saw a chance to prosper in the Hi-fi market, and started up a new Hi-fi company themselves. A bitter rivalry existed between the two companies, Boom and Jazz. Boom’s products were of course better than Jazz products. They were very successful and made considerable profits.”

“Hmm…interesting…so this bitter rivalry was the beginning of this corporate scandal?” I asked, eager to learn more.

“Yes. Boom’s last big boom was 2 years ago. Since that, its shares stayed around 15 NP a share, with two exceptions. One time was soon after the big boom, and the other, very recently.” He pointed to a graph on the wall.

“And this recent small boom was found out to be a corporate scandal?”

“Exactly. Some investigators went to…well…investigate boom and found out the truth. They found out that Mr. Mynci and the company vice president John Jubs had been organising the sabotage of the other company’s Hi-fis The people over at Jazz noticed decreased business and Boom’s increased business and were suspicious so they sent those investigators.”

“So the investigators found out and reported this scandal to the authorities.”

“Yep that’s right. So that’s what the corporate scandal part was about. When this scandal was going on, Mynci and Jubs thought that this would bring them a large amount of cash quickly, so they sacked a lot of the workers, including the accountants. It all went out of control and then Boom! Boom boxes were finished as a company.”

I sat there, quite surprised.

“But why would they sabotage Jazz’s equipment? Boom was more successful than Jazz…”

“We don’t know. We think it’s because the founders became greedy and wanted even more profit.”

“And no-one knows where Mr. Mynci and Mr. Jubs are?”

“Nope.”

“Well, thank you for your time, Mr. Donkey.”

***

Wow. Some surprising facts there. We all know that greed doesn’t get us anywhere. Jason Mynci and John Jubs will be caught soon, and will get the punishment they deserve.

I was also interested to see the effect Boom’s bankruptcy had on the economy, and I found someone (“outlaw”) who had made a great guess:

“I got to thinking about BOOM, and wondered, just how much NP did Neopets remove from the economy by bankrupting it. This is all just a guess, but I was amazed at the numbers.

BOOM for 2 years has not done too much. That would leave 700 days of stock buying. Assume, 20% of the time it was unbuyable (below 15), and 10-% of the time was too expensive (above 25). That would leave about 500 days BOOM was in a reasonable buying price. I think BOOM would average selling 1 million shares a day, 50% of that time and 2 million shares the other 50% of the time. That would make for 750,000,000 shares of BOOM sold over the last 2 years. Let's assume some always sell for 25 NP profit, which would cause about 150,000,000 million shares of this 750,000,000 million to be sold off. That would leave 600,000,000 million shares of BOOM that were bankrupted. Or 9 billion NP lost in the bankruptcy (at a price of 15/share).

I don't know how accurate these numbers are, but they might not be too far off.”

I would like to thank ‘outlaw’ for making a brilliant deduction on the economic effects of Boom’s bankruptcy. I would also like to thank him for allowing me to put his deduction in this article. Thanks!


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