Share split - without dividend drop

  • Right so a lot of people saying we cannot have a share split without a dividend drop and the vote at the event was just tongue in cheek. As the person who shouted out the caveat of "only if you keep dividends the same" I'd like to share some thoughts.

    1. Firstly Adam was about to take a vote before I shouted the caveat he then amended the vote and took it. If he wasn't considering this he wouldn't have changed the question.
    2. Think about how FI make their money and what they care about. They want growth (New money) and commission (sales) now a low price is good for growth and a high price is good for commission.
    3. The best way to drive growth is to double shares and halve the price while leaving dividends the same. Everyone has broadly accepted a £12-£15 market cap on current dividends. If you halve dividends you halve the market cap and thus your share split was pointless.
    4. "But they did it before!" Yes they did but my gut instinct tells me they realised 20p media dividends on 6 players was not in their interest. They needed a way to drop the dividend to make a profit. They will have learnt this lesson and know where the profit is now.

    Any thoughts on the above folks?

  • @Noirx4

    On the flip of this, these are not necessarily my actual views.

    1. i Wasn't there but from the people i know have gone heard it was shouted out and then the vote got changed... So cannot comment on this, however surely he would have led with that question rather than hope someone shouts this out.

    2+3 I agree with you here and long-term this is surely the objective either double divd or a share split.

    My counter to this is we still don't have an Android App something in production for over a year. Divd are getting delayed and paid later and later. Queries on players names are not being resolved. We have a world cup and more advertising to get out there.

    Does the above sound like a company that can just double costs overnight. Don't get me wrong i would love it to happen. I don't like this road . We need to kerb this talk to the new season or next year.

    Surely this would be done before a big advertising campaign, not just after one. Surely this would be after the world cup now.

    The clux is do you believe FI have the money to double their costs, is there enough users willing to put more money in/ they can get enough new traders to invest if they split the divd or doubled the divd. this will have to be over the long term they will need to double their trading volume over the long term not just have more people hording some top MB/PB players for 9 months of the year.

  • In my honest opinion, all the talk about it lately has made it into a thing when it doesn’t need to be. I wasn’t around when it was tried last time but personally, right now I don’t see a reason to change it. The platform needs to find stability and trying to bring in new customers and doing massive ad campaigns only to then chop and change how they’re going about it, it doesn’t make sense to me. It’s working just fine as it is. If the footie starts to show a loss and there is a significant drop in new customers then they might need to change how they do things. But that’s certainly not the case right now. Yes we all want as much money as possible and to make bigger and better profits but why try to fix something that isn’t broken? Considering there’s numerous chat of “well new people might not be interested”, I’m still new and can’t fault the potential. Personally it’s all a lot of talk for no reason and I’ve seen numerous posts lately where people just seem greedy instead of understanding this is a business and is still new. There’s plenty of time to change things in the future but right now I think it’s about growing the platform and looking for continual operational stability. There’s bigger need for improvement elsewhere (like a fully working functional android app, a watch list connected to account etc). Sorry for the waffle 😂

  • @FranklynMary Forgot about the Watchlist lol...I remember when i first started and thought it was just my account lol. This was all before i took it very seriously mind. Must ahve wasted like 20-30 mins trying to get it to connect such a naive idiot I was. Why they don't get rid it off altogether is beyond me

  • @toaster-poster
    Exactly!! Priorities haha. I think a working watchlist connected to the account and tracks how their price has changed since you added them would be hugely beneficial. Add that to the ability to track MB and PB or use @Noirx4‘s data to track how your watchlist players have returned dividends along with said price variation tracking, that’d be a winner 💪

  • @Noirx4 I literally agree with everything about this post. The only reason to half shares AND dividends is to make it more affordable for people. I wasn't around the first time it happened but I'm sure it definitely made the buzz payouts more affordable. If they done it now ppl's current portfolio would remain the same as you'd have double the shares being paid out at half the price so no issue... However, over time these prices would rise back up and then people would be paying over the half amount of what they currently are for half the dividends. So it would devalue it for us. Who's gonna pay anywhere near current prices for a 2.5p payout? So if they half the shares n leave the dividends the same it's gotta be for growth and new money. Cos otherwise there just giving away free money to us by basically doubling our portfolios.

  • Hi Stu
    Good to meet you at the trader meet and just for the record I’d recommend everyone look into Noirx4 £1 data service.
    Anyway, getting back on to the topic. I was speaking to a tech guy from the FI team at the meet and we started discussing the share split and dividends structure. And he was saying that the current dividends payouts in terms of percentage on investment is very high in favour of the trader, which is obviously why the platform is so appealing at present but this is quite a big problem for FI and I get the impression they feel they are over paying out in dividends already, so the prospect of a share split with no change to dividend structure is extremely unlikely especially in the near future.
    I do hope I’m wrong though.

  • @John-Renwick Hi John

    Re read the post it's to keep Dividends the same, So you will get double the payout from FI.

    The issue with the halving of Dividends. Is that you will have it every year people will want this to happen until Dividends become worthless. Are new traders going to be interested in a 2.5p Media dividend and a star position and player dividend of 9p.

    The price ceiling of players lowers for these players as the top players will return less in Dividends a year.

    Personally, i can see it from both sides but this does not fix all the problems stated above.

  • If I was a betting man (and I am) then I'd probably say the chances of this are roughly 0.01%. So there's a chance ...

    It doesn't make any rational sense for the company - surely they can't be making that much money to give that much away.

  • @mike778 From all the buying and selling of players and the 2% commission FI get each time that players are sold, plus players that are heavily overpriced that get low PB and MB that FI receive money for each time the players are brought yet few people sell, I would say FI have absolutely millions spare and are in a very healthy position.

  • @NewUser59855

    It's not "Spare" though is it - keeping a track on their liability must be one hell of a task. You also need to take into consideration the overheads (wages, systems, gambling tax etc) as well as the capital required to keep the promotions up.

    From attending 2 meetings and the conversations I've had with Adam and the rest of the guys I get the feeling they're very honourable, in control of everything and in a healthy position - however I agree with @mike778 there's sod all chance of a share split with div's staying the same (Sorry Stu)

  • Maybe, but then I don't think their liability is that much in the grand scheme of things. They won't need that many employees either as technology makes it cheap and computers do work of people nowadays. Gambling Tax will be a chunk but they still have a lot left over. Promotions won't make a big difference as it's not as though they're giving £1 million away to people. As for them keeping dividends the same... why are people going to buy Neymar at £25 to receive the same amount of dividends they are now? People will realise there is no money to be made in doing that and won't bother, which means there will be no more growth.

  • Technically their true profit is commission minus (bonuses plus dividends). All the other money they get may look good on the cash flow but is a liability in real terms.

    Check your transaction history ... how many people have higher dividends (plus bonuses) than commission ? If you do then you are costing FI money. How many people are FI profiting from ? By the way this doesnt indicate how good a trader you are ... just whether you are profitable FI . Both sides can profit and both can lose.

    IS complicates things as the spread doesnt show on commission I think (it should). Would be interested to see their accounts. Either way I dont see how they could even consider such a massive handout.

  • @NewUser59855 said in Share split - without dividend drop:

    why are people going to buy Neymar at £25 to receive the same amount of dividends they are now? People will realise there is no money to be made in doing that and won't bother, which means there will be no more growth.

    That's all well and good to ask but like I mentioned about how right now things working perfectly fine, you can't say 'This WILL or WONT be the case'. Will Neymar reach £25? He might reach £15 and people refuse to buy him anymore. Likewise he could reach £40 and people still be buying him. If there is no more growth and there appears to be a ceiling then something would need to be done. But right now, the platform is still growing incredibly and will continue to do so with the dividends remaining the same.

  • @FranklynMary Perhaps, but I don't see how I'm going to get a profit out the top players if it isn't increased in the near future. If I buy a player for £5. He then only returns me £1 in dividends per year in a good year. It means I have to rely on him having 5 good seasons to receive back the equivalent of the money I have invested. Even if after 5 good seasons I receive back the equivalent to what I have invested however the player has plummeted to only 50p value (like Ibrahimovic, which I saw coming) I will have made very little profit, even out of players who have done well for a long time with dividends returns.

  • @NewUser59855
    Yeah, you've basically summed up the platform. You've got to understand there's no guarantees and you can't wish for a share split or changes just because it makes things easier for you. Likewise, that player you bought for £5 could rise to £10 in a year, doubling your money with the addition of PB and MB too. You're commenting like it's bound to go downhill. Yes it could go down, but it could also go up, and currently that's the way it's going. There are no promises and you've got to understand that when investing in this platform. You've got to work for it and earn it.

  • You need to compare that 20% finance income per year to what you achieve having the funds in a bank account. If a player is returning 20% then his share price will inevitable increase thus reducing the return on investment. You get in early and you’re looking at capital appreciation and phenomenal return in finance income. You get in late and you’re looking at a more realistic return and limited capital growth, but all being well much better than any savings account. I think you are unfortunately missing the point on a grand scale.

  • @toaster-poster I know all of this, was just replying to Noirs post and in relation to him mentioning 'if' both were halved and why it happened before.

  • I might be missing something here but if the share split occurs and they do cut dividends, what's to say they can't then gradually increase the dividend payout as player prices rise again?

  • That would be a circular reference

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