MyFondia VirtualLawyer
December 7, 2017

Day 5 - How does Santa finance his operations?

A company's operations and development require capital, especially when the company is growing or looking into international markets, as Santa Claus' business has genuinely done since its early days.

The company's operations can be funded by internal funding, i.e. through the company's operations or by external financing, for example by raising share capital or debt. In the case of Santa Claus, internal funding would be problematic, as the result of Mr. Santa’s operations is known to be nothing but immense joy.

The company also needs to know its baseline, such as its market position and financial situation, being the return and cost structure. In the case of Santa, the market position is unambiguously monopolistic, but the cost structure is challenging because the resources are numerically unmanageable.

When the base is solid, a company may start to reach for the stars, in the case of Santa to the night sky of December. Before the growth effort, it is still necessary to ensure that the business legal matters are in order. It is worthwhile to go through the shareholder agreements, intellectual property rights and employment contracts. We will come back to Korvatunturi's intellectual property and shareholder agreements later.

What about IPO? Would an initial public offering be a possible form of financing for his business? Listing is usually carried out by arranging a share issue to extend the company's ownership base and obtain additional funding. In addition to responding to the financial needs of the listed company, the aim of listing is often to increase the liquidity of the company's shares and thereby increase the shareholder's holdings. In the case of Santa, the IPO is unlikely to be possible, as the shareholding is, as far as we know, mainly in the hands of the Santa and the Mrs Clause.

So how does Santa fund his business? It may stay as a part of Christmas magic and remain an unsolved question, or who knows?