IPO’s are the way Football Index add fresh talent to the Index. They are exciting, but they have their drawbacks. Carry on reading this post for my thoughts.
What does IPO mean?
IPO is an abbreviation for Initial Public Offering. When Football Index perform an ‘IPO’, they add a new player onto the platform.
What is the process?
Prior to the IPO, Football Index will release a list of players which are to be added. This list includes the Player Details, such as position and club, but also includes important information such as the Entry Price & a Time of Entry.
What is the Entry Price?
Football Index decide the entry price of a player before he enters the platform. This is performed by the Trading team, who assess what price he should join at. They have to take into consideration not to make the entry price too low, as it could de-stabilise the market, with other traders selling their holds to purchase shares in the new one.
Often, they set the prices high, which is better for the sustainability of the Index.
What time will they enter?
Each player has a designated timeframe, but this is a wide window, not an exact minute. For example, Player A may have an entry time of between 10:00AM-12:00PM, whereas Player B would have the 12:00-14:00 time slot.
Multiple players have the same timeslot on any given day, so expect a few players to be added!
Benefits of the IPO Process
- IPO’s ensure that the latest talent is added to the platform, keeping it alive & entertaining. It’s often quite frustrating seeing a potential talent on the pitch, without the ability to own him on Football index. With IPO’s, you are able to own more players.
- Football Index value the entry point very successfully. I’ve laughed a few times at players which were IPO’d at a high price, maybe even been annoyed sometimes. However, in the long term, the values seem fair. One I seem to recall is James Milner, I’m sure he was IPO’d at £2.10, with lots of ridicule on twitter. 18 months later he’s the equivalent of £2.50, which is a significant rise for a player that hasn’t set the Index alight!
Drawbacks of the IPO’s
- When IPO’s are announced, they tend to harm the market somewhat. Players tend to sell their current holds, to free up money to get the new releases. This can harm your portfolio when traders dump certain players that you may hold.
- The IPO process doesn’t seem fully ‘fair’. The current process is fastest finger first method, which means if you find him first, you will get the best possible price. However, this opens the platform up for Automated Scrapers (Bots), who can query the platform up to 100 times per second. Compared with a human, who would take up to 5-6 seconds for a single check.
- The more players that are on the platform inevitably mean you have less chance to win.
Everything has it’s drawbacks. I am a huge fan of IPO’s, although I must admit I rarely get involved in them.
I applaud Football Index for setting the prices the way they do. The IPO prices are generally expensive, which is a HUGE must for the platform.
WHY? Most traders use IPO’s to flip players, they aren’t interested in actually holding them long term.
If a trader does fancy a player, they would sign him up regardless. So the high priced IPO’s actually help to stabilise the market somewhat, as fewer people will be interested in getting on them.
Let’s look at it the other way, if they were to release a player onto the platform (with decent prospects) for just £0.01, every trader on the platform would want to get involved, and it would end a bloodbath.
IPO’s are a must for the platform, as it needs to ensure every player from the eligible leagues is available to purchase, aswell as talents from more obscure leagues.
I don’t really like the idea that traders take advantage of IPO days by flipping for a profit, nor do I really like them! But they are vital for the platform.