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So much to get stuck into from last night’s @footballindex announcement. I’m going to use this thread to share my analysis and also get my own thoughts into some sort of logical order.
Let’s start by picking up where my last thread left off, which was a question on whether the new #footballindex management was sufficiently brave enough to be radical in the face of the current challenges.
We have our answer.
We have our answer.
The removal of IPDs, introduction of Match Day Extra and significant changes to the share issuance model show that the new CEO is not just a “continuity candidate” - he's an active reformer. But has he put the ball in the open goal?
Firstly, let’s be positive about the rebate, which was announced with little fanfare. Now that IPDs are gone, a rebate like this is genuine stimulus. Not so long ago people got extremely excited about offers like this, let’s not forget it amongst the other initiatives announced.
Secondly, Matchday Extra dividends are a big upgrade on IPDs in my opinion. Yes 1p across the board is a bit tight and I hope there is room for growth here. But the concept is good and gets us back to the core FI product.
A new dividend that rewards a long term mindset was always going to be the minimum bar which had to be cleared for me to be happy about the change and I think FI have just about managed this.
We now effectively have TOTD (PB), TOTW (MDE) and TOTM (TOTM). At some point some thought is going to need to be given about how these are unified into a sensible and marketable wrapper but there is time for that in the future.
I’m not going to dwell on introducing scarcity of supply. Oversupply was never an issue in this market / product except in people’s own minds. @figuide and I have spoken and written extensively on this and I’m surprised FI have felt the need to address it.
The one million share cap is therefore a cosmetic change that assuages the irrational fears of traders rather than solving a genuine conceptual problem. Maybe this is fine, anything which creates positive sentiment is to be welcome no matter how unnecessary.
Now onto the less good. “Entering competitions with shares” does not sound like a direction I would want FI to go in. In business it’s a good idea to not try and be all things to everyone. FI have their own core strengths to be proud of.
Sorare is a brilliant product but let them be brilliant at it. I know less about FS or SS but again, they have their own USPs. I don’t think FI need to be trying to replicate elements of others’ product ideas. Hopefully this is a throwaway idea that stays thrown away.
Finally we come to the Trojan Horse of the announcement around share issuance. Whilst I’m positive about pretty much everything else above, I’m equally worried about this new issuance curve. This was very unexpected and has left me feeling quite anxious about the long term.
My worry is philosophical rather than technical - FI have potentially broken the aligned incentive that existed between us and them. It was a part of our shared bond that we both wanted prices as high as possible.
Getting prices back to all time highs were in their best interests and ours - they needed minting revenue, we needed capital growth. Now that aligned incentive is broken it leaves me feeling like our interests are diverging.
I’m willing to reserve judgment until we see the detail but this doesn’t sit entirely right with me. Maybe I'm overthinking it, we will have to wait and see, but the opacity in itself is enough to leave me concerned for the future.
So, in summary: Strong marks for answering the exam questions set but some new worries now too. I won't miss IPDs and I think we are in a better place for their removal. We are in a new era for #footballindex, which has to be better than the slow bleed of the last four months.
I'm impressed with the action taken to arrest the recent decline and there's more chance now that things really pick up from here with more liquidity, rising prices and stronger sentiment. So much to be hopeful about and I'm looking forward to the next stage in the journey.
