Big Market Correction Underway!
Last night Empire Avenue introduced the changes to dividend and share price calculations which it announced a couple of weeks ago. Lots of people’s share prices are down significantly this morning. Mine is down 3.83e. Others are down as much as 10e.
While I haven’t had a chance to assess dividends, Michael Mannion stated that we can expect dividends to be reduced by 10%-15%. However, that is after Dups acknowledged that dividends jumped about 10% earlier this month due to better data collected.
Here’s my analysis…
While I’m seeing words like “bloodbath” and “carnage” tossed around this morning, let’s put this into perspective. We’re talking about a drop in share price of 5%-10% after months of double digit increases. Furthermore, my understanding is this is a one-time adjustment.
Personally, I do all my investing based on dividends and yield and don’t ever look at whether share prices are up or down for the day, but if you do look at change in share price, just take the day off and go to the beach and enjoy a margarita or two.
As for the reduction in dividend, Dups stated:
The problem is that if we let hyper-inflation continue, we may not have a product at all in the future, I know that sounds a bit doom-saying but it could happen as people at the lower end don’t bother, or if the value proposition to join Empire Avenue goes away.
EAv is in a difficult situation, as the wealthiest players wealth increases exponentially, they compete for mission attention by increasing mission payouts exponentially, making it difficult for new EAvers to do missions successfully. EAv as a platform and a company will not survive unless it can dramatically increase the number of new users who sign-up and stick with it.
EAv needs to reduce inflation.
And again, let’s keep this change in perspective. a 10-15% drop in dividends after 10% increase is a net decrease of 0%-5%. That is negligible. Not only are users not going to feel it, but it’s not going to make a dent in the hyper-inflation problem.
What do you think?
via Empire Avenue Tips http://empireav.wordpress.com/2013/06/12/big-market-correction-underway/