Chapter 51: The Paris Angel Company Goes Public
In 1717, to resolve France's enormous debt, the financial titan John Law founded the Mississippi Company, obtaining exclusive operating rights to the Louisiana colony from the French government. The company then began issuing shares.
Due to rumors of vast gold deposits in the Mississippi River region and the company successively acquiring operating rights for more French overseas colonies, stock prices soared.
From an initial 500 Livres per share, the price surged to a peak of nearly 20,000 Livres—yes, you didn't miss a zero—the stock price multiplied fortyfold!
John Law believed this was his chance to eliminate France's 1.5 billion Livre national debt. Starting in 1719, he issued additional shares five times, leveraging the skyrocketing stock prices and coordinating with the Royal Bank to issue banknotes. He genuinely managed to erase the French government's debt in one fell swoop!
Of course, it was impossible for him to earn 1.5 billion Livres within three years; all the money was generated by the stock market bubble.
In 1720, as countless gold prospectors found nothing, the legend of gold mines in Mississippi began to crumble. This led to the Mississippi Company's stock price plummeting, and people frantically sold off their shares, driving the price down to below 200 Livres.
The French ruler at the time, the elderly Prince Regent, Duke of Orleans, hastily revoked all of the Mississippi Company's privileges. The Mississippi Company went bankrupt, and billions of Livres in speculative wealth vanished overnight—an amount equivalent to over thirty years of France's total financial revenue at the time!
Countless people who had bought Mississippi Company shares went bankrupt, plunging all of France into a severe economic crisis. Industry and commerce ground to a halt; only agriculture barely survived, which subsequently led to the rise of physiocracy in France.
John Law left behind utter chaos and fled to Brussels, while France took decades to recover.
France followed suit, mandating that any company wishing to publicly offer shares had to be reviewed by the cabinet and approved with the King's signature. Consequently, a company would typically only be approved to go public once every decade or so, and regulation was extremely strict.
Of course, none of this was an issue for Joseph.
The Minister of Finance and the Minister of Interior had long since become beneficiaries of Paris Angel Company shares, and the King and Queen were practically on his side.
Moreover, Joseph guaranteed in the cabinet meeting that the Paris Angel Company's stock price would never exceed 30% of the company's actual value, and publicly offered shares would not exceed 40% of the total equity. Furthermore, if the price fell below a certain level, the company would provide funds to support the stock price.
Having confirmed that all financial risks were eliminated, Louis XVI readily signed the proposal for Paris Angel to go public.
Joseph actually had a lot of room for maneuver here. What exactly was the company's actual value? If a single store selling 120,000 Livres worth of goods daily isn't valued at 5 million Livres, wouldn't that be an understatement? Then the entire Paris Angel Company could easily be valued at tens of millions of Livres.
However, Joseph also didn't want to drain the pond to catch all the fish; destabilizing the stock market would benefit no one.
After all, the Industrial Revolution required significant capital support, and a healthy stock market was a necessary guarantee for industrial development.
Besides, another incident akin to the Mississippi Company affair would likely accelerate the arrival of the Great Revolution.
In the open space in front of Paris City Hall, a waist-high wooden platform had already been erected.
The platform was adorned with numerous ribbons and garlands, as if celebrating a festival. A banner at the top of the platform proclaimed, "Paris Angel Company Stock Offering."
Chairs filled the area around the platform, while on the platform itself were the stock traders' booths and staff sent by various banks to provide services.
Most conspicuous was a large, smooth wooden board on the left side, with the prominent words "Transaction Records" carved at the top. This was where transaction information would be displayed in the future.
The entire trading venue covered an area as large as two modern football fields.
Due to John Law's infamous schemes, the French had grown to dread the mention of stock trading, and the Stock Exchange was deserted. After decades, it had become dilapidated and cramped.
So Joseph simply set up the trading venue outside the City Hall.
At 10 AM, as a melodious drum and bugle call rang out, people around began scattering flower petals. Brent stepped onto the platform and announced loudly, "The Paris Angel Company officially begins public stock offerings! Anyone can invest here."
An assistant immediately displayed the document bearing the King's signature, permitting the stock issuance, for all to see.
Following this, officials from Paris City Hall each took to the stage to offer their congratulations on the Paris Angel Company's public listing.
But the investors were already impatient; no one paid any attention to the officials. They swarmed towards the trading booths, loudly declaring the number of shares they wished to buy. Even Brent was almost knocked over by the crush of people.
Such a sight hadn't been seen in France for decades. Previously, even when major banks issued shares, people remained extremely cautious, and buyers were few.
However, Paris Angel had made thorough preparations this time. Not only were there overwhelming newspaper advertisements, but the specialty stores themselves had physically appeared across Paris, and everyone had witnessed the bustling renovation scenes.
Just yesterday, three new Paris Angel stores in Paris opened simultaneously, drawing a massive turnout. Countless noblewomen and young ladies squeezed out of the stores, clutching their purchases, their faces beaming with excitement and satisfaction.
It was rumored that even more Paris Angel specialty stores were planned for Reims, Marseille, and other cities, and preparations were even underway for new stores in Britain.
Furthermore, the Paris Angel Company promised that if the stock price fell below 80% of the issuing price, the company would immediately buy back all shares.
At the same time, the stock price also could not exceed 30% of the company's actual value.
Everything demonstrated that the Paris Angel Company would not form a bubble! It was completely risk-free!
Witnessing the booming business of the specialty stores, everyone believed that stock dividends would surely be substantial. They concluded this was a rare investment opportunity—just buy it!
Soon, an employee from the Stock Exchange wrote down the first transaction information on the wooden board displaying the transaction records—
Buy, Paris Angel Company, 2 Livres, 30 shares, Total 60 Livres.
Then came the second transaction—
Buy, Paris Angel Company, 2 Livres, 105 shares, Total 210 Livres.
The third, The fourth, The fifth...
The Paris Police Bureau had specifically dispatched over sixty police officers to maintain order at the trading venue, barely managing to prevent the situation from spiraling out of control. Surrounding journalists widened their eyes, recording this astonishing scene.
At 9 PM, Brent and the Crown Prince's personal accountant excitedly arrived at Versailles.
In the Crown Prince's reception room, Brent, with a slightly trembling hand, presented Joseph with a statement issued by the Stock Exchange.
The accountant beside him immediately exclaimed excitedly, "Your Highness, a total of 773,000 shares were sold, totaling 1.55 million Livres!"
In truth, this was mainly due to the manual nature of stock trading in this era, which was extremely inefficient. The maximum speed for traders filling out forms and banks processing transfers was 2,000 transactions per day, totaling over 700,000 shares.
Outside the City Hall, people continuously arrived to buy shares, packing the area shoulder-to-shoulder, but only a small fraction of those who had queued since early morning truly completed their transactions.
Joseph praised Brent and then calmly instructed, "Transfer all funds to the French Reserve Bank. As I previously instructed, there's no need to report back to me until the funds reach 6 million Livres."
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