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Football INDEX Insight: What Is A Share Split And The Potential Impact Of This

There has been a fair bit of talk recently which seems to be gathering pace with the ever-growing size of the Index. With news of the product arriving in Ireland this month that will increase users numbers and therefore market value. Likewise with the news of football pundit Guillem Balague becoming part of the marketing push that will give reach to millions of his followers, then there is only going to be positive growth for some time.

Therefore, the realisation that the second share split may soon be coming is a serious possibility. This led to Mike Bohan, the marketing director of Football Index to conduct a twitter poll on the issue. Even though in no way this suggests there is one around the corner, the fact 84% of voters said they wanted one cannot be ignored. Furthermore, the point that this is being considered at the decision level of the business shows the likelihood of a share split in the future.

The 2016 Share Split

A share split has been seen before in June 2016, where a share split of 4 was undertaken. Essentially, all player prices were ¼ in value with all futures, therefore, being multiplied by 4. The main reason for this move was to increase the value seen in players. For example, Ronaldo’s price was around £6 before. After the share split his price rose to £2.10 per share equating to a £8.40 price. Consider this now that if this share split had never happened, Ronaldo would be priced at over £40!! Clearly, this figure would be outrageous to contemplate and hard to see value from for users which could put off many new users for obvious reasons.

The dividend returns before this were set at a single 20p per day payout for media winner. This was long before the time of performance buzz. Returns were therefore changed to 5p, representing the ¼ cut in player price. So even though the returns per share were exactly the same, the positive sight of lower prices automatically had the desired impact. It could be argued that this was an essential move to become the platform that is loved by many today.

How Could This Work Now

The simplicity of the 2016 share split was down mainly to the single media payout. This was divisible to a whole number, something I’m sure Football Index had planned since the birth of the platform. One issue we have today is that can not be the case, with odd numbers (5p media buzz), along with a range of performance buzz prices (2p – 18p) meaning a solution to maintain a whole number must surely be altered for.

Either dividend may be increased so as minimum 1p of a dividend can be earned. For example, a simple share split of ½ could lead to a small adjustment in regards to media buzz and maybe even performance buzz. Obviously, this would have a massive effect on the value of players with percentage returns now potentially being significantly improved. I would not like to speculate on this as it is guesswork at this stage as to how it would work.

The Value This Could Add

Players will immediately be seen as cheaper, regardless of dividends being increased or not. Users will see players at lower prices and automatically would be more inclined to purchase them. The high-end players like Neymar, currently £13.53 will be seen as a better value and hence demand will increase.

It also has the value for attracting new users, as touched on previously. This is another major bonus and will lead to a big increase in users, alongside global expansion and increased marketing. If a share split was announced, then it would be exciting and positive news for all users. It would more than likely lead to lucrative returns on players purchased prior to this.

Adam Cole has stated that a share split is not in the near future up to Christmas this year. After this stage, however, it would not be surprising to see one in 2019. Football Index’s plan this year were to consolidate their position and enable expansion on the scale we are just starting to understand and appreciate. A share split was probably not even in the discussions at the start of this year’s planning. The growth seen in 2018 was probably far beyond anyone’s wildest dreams!

Lastly, if the share split does happen I would highly recommend investing before it is taken into effect. Users will have to be given prior knowledge of this and time will be key in order to maximise profit. It would certainly be an exciting move and one which surely will happen in the future. There is still so much room to grow in a global football betting market and Football Index is barely touching the surface. Onwards and upwards!

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