Share Split or Fraction



  • OK, so I've seen a few posts on here and twitter about the possibility of a share split and what appears to be the alternative, fraction buying.

    Personally, I think a split is the way to go as it enables new users to have access to the top players but protects the existing by multiplying their holding. Simple and effective. A fraction buy would for me just cause endless confusion and disappointment, 5p from a £25-30 investment for a new user??!! Also, the confusion around fractions and dividends calculation. A split would mean new users looking at Neymar for £7 ish with his previous price achievable again in a few months. But with Neymar at £25-30, what would the impression be. First question will be what's the dividend return? Fine if you now hold 3x the amount, but for someone new?

    I'm happy to be proved wrong, but a share split seems to benefit all, but a fraction buy system, only the existing users at the expense of the new. If we are to grow sustainably, we need to make the platform as appealing as possible. We will all benefit in the end.

    Thoughts?



  • Hi - i strongly agree with you. Its far more appealing to have whole shares rather than through decimals. They mentioned this as an option as its how bitcoin is traded.

    I dont think anything will happen in the short term as the IT Team have other priorities.

    I believe when they did a share split before it was 1 into 4 so they could do the same again and hopefully they have the IT routines saved somewhere to enable them to do the same again rather than designing something new!



  • @Metropolis_山の中の市 i dont believe either will generate much growth. A dividend increase is what we all really want.

    Should a share split take place why would new users care? For example you can now buy messi at £6.50 and earn 2.5p in mb or 6p on treble day. Sure 6p is 1% but i think FI needs to be in a position where people can generate north of 10% a year in dividends for people to be passionate. Any growth is icing but its the dividends return that provides the long term income.

    Happy to debate this. A share split could be better if it forced them to round dividends up. But i imagine this would be unlikely.



  • @Noirx4 sure, but everyone knows Messi will go back up to £13 (double) in no time, whereas with fractions, eventually the return vs price puts a limit on how attractive it will be for new users, limiting the growth of the platform.

    Share splits can easily be repeated for future growth as well. Just split and grow, split and grow etc etc.



  • @Metropolis_山の中の市 why would he go back to the same price as he would be returning every reducing returns. Without a dividend increase there is no reason for repeated share splits to generate growth.



  • @Noirx4 I think I see the problem. I think people are thinking split the shares and keep the current dividends which won't happen.



  • @Misto that would be the dream and would drive infinite growth but FI have basically completely ruled this out in previous interviews. Only thing that might happen is a dividend round up depending on the split. Which would be a dividend increase.



  • @Noirx4 right on, would be the dream. I think with factional buying everyone can play no matter what your bank roll.

    With a split it only makes the players look cheaper, but the dividend would be lower anyway. So same difference, apart from if Pogba is say £30 and the split by 4, he'll be £7.50. Still out of reach for say the guy "asking is £10 to start worth it". In factional buying he could by Messi, Neymar, Pogba, Ronaldo at £1 worth. Then spend £6 on other young players ect at 50p a time. He now has more players and more fun watching for MB and PBs. Insted of logging in every week with his £10 a buying 1 or 2 shares.



  • Is there any one else who thinks neither should happen? If people want to buy messi at £15 plus a share that’s up to them to weigh up the pros and cons. Let’s just say messi is worth £22 when he hangs up his boots and lets just say he started at a pound. That’s 200,000 shares in messi being sold off and dumped on the other players on the site, provided people don’t withdraw.
    We just need to be on the “other” players when that happens! And that goes for any new player, if you can’t afford the current invest in the future!
    Most people buy not for dividends but for price rises any way that is where the real money is to be had on this site



  • @Noirx4 my thinking being that they would share split with a dividend split, which would stimulate growth in itself due to the appeal of the top players at a low price, and then use a dividend increase (return to current levels) as an incentive later on to further stimulate growth. Similar to how they use the deposit bonus and other announcements.

    I can't see any reason the cycle couldn't be repeated, with everyone winning. FI convert new users from sceptical £100 investors to £1000+ buying into the top players, and existing users anticipating future growth and dividends and the anticipation of future splits. New users win because at face value the prices are lower. Granted, the dividends are less but future gains and increase would offset this and the accessibility would in itself be attractive enough. Imagine the people seeing the tube ads etc today with the low prices, signing up, depositing and then see they are now priced 4 or 5 the amount on the ads.

    Finally, existing users win because we know its only a matter of time until prices rocket and dividends go back to how they are. Rinse and repeat as many times as necessary. Share split when the top players reach £13+, and dividend increase when they reach £9-£10 again?



  • @Misto said in Share Split or Fraction:

    @Noirx4 right on, would be the dream. I think with factional buying everyone can play no matter what your bank roll.

    With a split it only makes the players look cheaper, but the dividend would be lower anyway. So same difference, apart from if Pogba is say £30 and the split by 4, he'll be £7.50. Still out of reach for say the guy "asking is £10 to start worth it". In factional buying he could by Messi, Neymar, Pogba, Ronaldo at £1 worth. Then spend £6 on other young players ect at 50p a time. He now has more players and more fun watching for MB and PBs. Insted of logging in every week with his £10 a buying 1 or 2 shares.

    If Messi was priced at £35 (relative to Pogba at £30), his £1 would buy 0.03 of a future, with no dividend return, so don't think he would be having much fun watching for MB or PB. Or he would be so disillusioned the day after Messi wins triple PB and he receives nothing, that he leaves, never to return.



  • We're really not going to get both. The more shares in the market, the less shares FI get to sell. I would love what you want to happen, but FI won't fund it. Adam Cole plans to sell the company at some point as there going to do whats best for them, while keeping users happy, but not giving away the house.



  • @NewUser81312 said in Share Split or Fraction:

    Is there any one else who thinks neither should happen? If people want to buy messi at £15 plus a share that’s up to them to weigh up the pros and cons. Let’s just say messi is worth £22 when he hangs up his boots and lets just say he started at a pound. That’s 200,000 shares in messi being sold off and dumped on the other players on the site, provided people don’t withdraw.
    We just need to be on the “other” players when that happens! And that goes for any new player, if you can’t afford the current invest in the future!
    Most people buy not for dividends but for price rises any way that is where the real money is to be had on this site

    Fine, but what if more people would be buying if his price was lower? With a split, existing users keep the value of their futures by doubling the quantity, and FI make more money from new users buying into them. Ie spending money they wouldn't have otherwise. The amount invested in a day could double. It's the appeal of accessibility.



  • If you want accessibility even after a split a share will still cost X amount and you will have to buy in full shares, all be it at a lower price than now. With fraction buying there is no limit, buy 10p in Messi if you want.



  • @Misto the additional money invested would offset the extra shares. Surely, the growth would be relative to the amount invested? If a 10% bonus deposit now and then is sustainable, then a share split to stimulate increased investment must also be, percentage wise.

    In order to maximise the value of the company, he will surely be aiming for mass appeal, which is only possible by making it more accessible.



  • @Metropolis_山の中の市 FI make the lions share of their money from selling shares, they sell 10 shares of Messi to the market they make £141.90.

    From our point of view what you are saying is great. From FI's not so much. Fraction buys is a good both. I'm looking at what is most likely.

    BTW I'm enjoying this debate, cheers



  • One of the ways FI could breakdown is if they can’t afford to pay out the dividends. So they need to be damn sure, if they one day share split and increase the dividends, that can actually afford it. They are right to be wary about it. But if they don’t increase the dividends after a split there will be little to entice ppl to buy the top players and the Index stagnates and possibly eventually collapses. So it’s a balancing act.



  • @Misto

    Simplistic calculation I know, and please tell me if I'm missing something...

    if they sell 100 shares at £14.00. £1400 with 8p payout. Additional £8 payout.

    Share split 1/2. 5 x as many people buying shares.

    Sell 500 shares at £7. £3500 with 4p payout. Additional £20.00 payout.

    What value would 10p in Messi give you?



  • @Metropolis_山の中の市 You'r making a assumption a share split would increase buying. I can't speak for others, but 1/2 the current price wouldn't make me buy 5 times the amount, and like Noirx4 pointed out new users would not care if there has been a share split, and its dividends that drive the price. If for example they split Hazard, and I felt he was over valued at his current price, I would not start buying him at £6, because his value to me would still be the same, because the dividends would also be cut in two.

    I would guess on the second question. What would 10p of Messi give you, it would but factions of a penny in dividends. They only way I could see around that is adding extra decimal places to the dividend pay outs, but only letting the user spend or withdraw whole pennys. So you won't miss out on a payment, just have to save up a bit to use it.



  • @Metropolis_山の中の市 Oh extra point if they sell 100 Messi for £1400, they would put aside way more than £8 for dividends. More like £300.


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