@stewie

“Quite what the board meeting at the start was, and what his company does, is never made clear.”

He says later that he’s done 50 deals that made his first one ($10 million becomes $1 billion) look like a loser. So he may be a takeover artist, or just buy companies that he thinks are undervalued.

A Board member asks whether this (the current deal) is a direction Roy wants to go in. ‘You’d be taking the company from oil services to …. ” Roy cuts him off. “Does anyone think the price of oil isn’t going to go up? We have to do this now. If we wait until the deal makes sense, then we’ll stand in line behind everyone else”.

So, the deal on the table is to buy a Canadian oil producer (”needs approval in Toronto as well as in the US”), paying what seems to be too much now, but will prove as profitable as his previous deals when the price (value) of the purchased company’s oil reserves rises.

The reference to “oil services” implies pipelining, etc. — where you charge a set fee or commission per barrel, thereby making money regardless of what the price of oil does. The Board member’s objection is that this relatively “safe” business becomes much riskier once Roy, in effect, is speculating on the price of oil.

Which is exactly what caused the collapse of Enron. Substitute “natural gas” for “oil”. Enron was a company that delivered gas (via pipeline) from, say, wells in New Mexico (lots of natural gas there) to gas distributors in Denver (lots of people there who need the gas to heat their homes, water, fuel their stoves, etc.).
And charged a fee, as above. Other than whether winter is warmer/colder, or population changes in Denver, a fairly “safe” business.

They got greedy. Enron started *buying* the gas in NM, or buying futures contracts (buy at a fixed price now for delivery some months later), then selling it in CO (or wherever), or reselling their futures contracts — in essence, speculating on the price of natural gas. We saw how well that worked out. (”well” was not a pun. ;)

So, the basic Company story line parallels Enron, which probably gave the writers the idea for what deal Roy is doing as the son’s health declines. Roy has always been right before….

Bankrupt himself vs. company: A valid, and severe, plot hole. He might have owned the company outright, in which case he could do as he pleased with it. However, with House short-selling, yes, it’s publicly traded, but Roy could have had a majority (controlling) interest in it, meaning he has enough votes to do as he pleases. Still, he has a fiduciary responsibility to the other shareholders — more on that in a minute.

Digression: House would have gotten more bang for the buck by buying put options — $10k was a ridiculously small profit. (apparently, he short-sold $10k worth, and covered at zero or a few cents. He’d need to put up collateral; the percentage of which varies, but let’s assume that House has, or can get a cash advance, for $10k.)

Stock: $50/share. Buy one-month puts with a $45 strike price @ $1/share = 10,000-share put option. Stock goes to zero, or a few cents. Exercise your put, by selling 10,000 shares @ $45/share = $450,000, less the trivial cost of covering the sale by buying back the shares for a few cents each, at most.

Back on topic: Roy needed to bankrupt only himself to keep his (unilateral) bargain with God. Giving those majority shares to a charity would not only keep everyone working, but “should ” increase his Karma, as others have noted. There was no reason for him to drive the company bankrupt, and you can’t accomplish that in one day, anyway.

Another flaw, more of a nit:

Assuming that he didn’t buy his $10-million-dollar mansion with the change in his pocket, or his kid’s piggy bank, (i. e., owned it free and clear), this was the fastest foreclosure ever. He had no reason to be late on the monthly payments until he made this deal with God, so he isn’t even in default until 30 days after the *next* payment was due. (Let’s assume it was due the next day, to be auto-drafted from his account.) Banks typically don’t foreclose until after numerous collection attempts, possible negotiations with the borrower for some kind of work-out plan, etc. Typically, only after the loan becomes about 5-6 months behind.

OK, they read in the newspaper that he intended to remain in poverty, and started the foreclosure process 31 days later. Even then, foreclosure formerly took anywhere from one to six months, depending on the state; this show was taped as the US mortgage foreclosure crisis was in full swing. It’s often a year to complete the process and repossess the home.

However, he may have voluntarily signed it over to the bank in lieu of paying the mortgage. (Which isn’t instantaneous for a large bank. Review and approve, lawyers draw up docs, etc.) Even so, it’s not listed the next day. The bank would first have it inspected and appraised, to determine a reasonable asking price, as well as solicit opinions from Realtors in the area. The Realtor chosen then lists it and puts the sign on that. That doesn’t happen in a day, or even a week, assuming that there was some time elapsed before that shot of the “Bank-owned” For Sale sign on the property. More like a month or two, at least.

(My degree and profession are in the financial area. More of that in the parody at the non-commercial link in the signature to this post.)

Vol. II, replying on other topics, at another time. Self-imposing a length limit. ;)

Anyone who knows me knows I can’t pronouce things over 4 letters the right way, but I like the way I pronouce them and continue to do so.

Maybe Cameron is like me.

If we’re following what the shark did after he had finished jumping over House, MD, the answer appears that he converted to Christianity and became a Televangelist. Then turned his sharky talents to writing for the show.

This one is the parable of the rich man who thought that Karma meant he could lose his wealth and save his dying son. The “Instant Karma” of the show’s title. Foolish man loses both the son and the wealth that could have provided some kind of cushion to his grief. Buddhists bad.

Hugh, America must be the world’s most brilliant country if you have been offered permission to stay in it – just for signing up for four more years of this.

I could, of course, be wrong about this. However, there’s been no indication before that I know of that House has any familiarity with the stock market.

As harsh as this sounds, if the ending had been that the father signs away his fortunes and then the kids dies (or even just the kid dying would have been “good”), I would’ve liked it much better due to it being a change from the typical “patient is saved and everyone is happy” ending.