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| Author | An analysis of 2 years of share ownership |
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This is a follow up thread to a post I made 6 months into facility shares which can be read here (https://www.lordswm.com/forum_messages.php?tid=2820498)
I made some predictions and released some calculations, it is time to revisit
As before this is not supposed to be a bragging post but a candid and open look at the numbers
Shares were introduced to the game just over 2 years ago in November 2020. At the time I made a few predictions:
- Shares would be highly profitable in the long term
- The price of shares would rise consistently over time, yield would decrease
- Shares would be held by an elite subset of players who would continue to get richer whilst ordinary players would have limited opportunity to buy shares
- These ultra rich players would be able to control the economy and manipulate prices of 'player created' items such as elements and hunter arts
Not all of these predictions turned out to be true but for the most part these have materialised. The market manipulation by elite players did not play out as I had predicted but some players make vast amounts of gold from these.
...
Over the past 2 years I have been slowly accumulating shares. I've barely been playing the game and often enrolled to workaholic penalty, I have not used any diamonds to purchase shares but have built up my share holding just by enrolling and playing the game.
Over the 2 years I have built up a holding of 29 shares, approximately half of these were in the first 6 months and then the rest have slowly grown over time
I exported 54 pages of my transfer log and over 2000 lines of data to produce the following financial summary
Dividends:
In this period I have received 2,119 dividends (dividends are paid each week on a Sunday night)
The mean dividend was 965 gold/week
The median dividend was 837 gold/week
The standard deviation was 656
The lowest dividend was 0 followed by 30, 32 (some make very little)
The highest dividend was 5,307
Total dividends received were 2,004,073 (2 million)
When dividends are plotted on a chart they seem to form a distribution similar to a log normal distribution i.e. a bit like a skewed normal distribution with a sharp peak and long rightwards tail
Capital Growth:
I received 1 share from the empire, sold 1 share and bought 29 others
The cheapest share I bought was 200,000 (lucky)
The most expensive was 749,998
Average purchase cost was 377,299
Total purchase cost was 10,941,675 (11 million)
The share supply has virtually dried up and at time of writing there are 3 on the market. Normal shares currently sell for 750k-1m+ depending on how good the facility is
29 shares at 750k each = 21,750,000
Less proceeds of 10,941,675
= Capital growth of 10,808,325 (11 million)
So in 2 years of share ownership my profit (divs + cap growth) has been 12,852,298
...........
I've made 13 million gold from shares just by enrolling and buying them
i.e. approximately 26,000 enrolls
...........
I'm not even in the top 100 shareholders
The top shareholder owns 301 shares at time of writing so it is likely he has made more than 10 times what I have (more voting rights = better profit)
It is prudent to assume the very top shareholders have made 100 -150 million gold in the past 2 years (same as 260,000 enrolls (@ 500/enroll))
...............
My predictions moving forwards:
People aren't selling the shares, only buying and holding
Shares will become extremely difficult to purchase
Share price will continue to increase as there are no other ways to passively profit in the game aside from estates* and blacksmith*
Regular shares will head towards 1m+
Based on my figures the median share makes a 5.8% yield, this is pretty low already so there is a natural limit on maximum price. I think the absolute limits of fair value could be around 3% yield giving the median share a value of 1.45m. The ones with big dividends will be worth more. The payback time is already huge (more than 20 years)
............
What ar | What are your thoughts, how does the .com community feel about shares?
Who wishes they didn't sell? | I got 1 share and bought 2 when they were cheap(600k for 2 shares)
Made some chunk from dividends. And sold my own for about 550k one i bought for 500k and other for over 600k. Decent. If i didnt need to enchant dark set i would have kept and even bought few more. | | That's damn interesting. Thank you Acean. | Imo shares are not a good investment (anymore). Only for top dogs who have 20-100 million to spend is it worthwhile. For the average player, my advice will always be to stay away.
I see players buying 1 share thinking it will be worth it in the long run (dividends). It may have been when it was released, but not anymore. The cost per share is getting ridiculously high.
The only interesting thing about shares to me is swing trading them. Buy low, sell high. Good money can be made that way.
I'd rather invest my 100 million (if I had it) in other things. Like buying arts (adv items/stalker items/event artifacts, gladiator axe,..) and stockpilling them. Those will be worth more in the long run and even an average player with 500k budget can make solid profit if they just wait and resell for higher at a later date.
For the rich, the share system is a way to get rich even faster. Wallstreet introduced in a game where only the top 1% has benefits. Donate 10k diamonds to the game, buy shares and the game will generate a basic weekly income --> for me this should not be an option. But then again, who am I ;-) | That was an interesting read!
Unfortunately, I was inactive when shares were given out. | Imo shares are not a good investment (anymore). Only for top dogs who have 20-100 million to spend is it worthwhile. For the average player, my advice will always be to stay away.
I agree, although I think prices will continue to rise I think the ship has pretty much sailed on these.
This mechanism is strikingly similar to how Russian oligarchs made their wealth after the collapse of the Soviet Union. Ordinary people received share vouchers and these were consolidated into the hands of a few already wealthy individuals. | Less proceeds of 10,941,675
what is this part?
for Acean:
I think you may have miscalculated costs vs. profits, as you don't seem to have 29 shares.
Shares were a very interesting idea to me when introduced, however, making money through them seemed like another game of patience and I couldn't find the motivation myself to accrue more. That being said, it is good to see you don't regret buying them. | Proceeds is the price paid to acquire the shares
You're right that I made a mistake in my calculations though! it was a quick and scrappy analysis.
I actually acquired 27, sold 3 and received 1 from empire giving 25 total
Average cost for acquisition was 370k
Total cap gains is roughly = (750-370)*25 = 9.5m
Total profit = 9.5 + 2 = 11.5m | Interesting topic.
I do not like that shares are so expensive. It makes much less point to buy them for dividends for any player.
It's safer to trade artifacts to make a profit as Arcanide wrote.
That being said, shares can go up in a snowball effect. Players generating excess of gold will just keep spending on shares.
Admins can easily set an indirect cap on share prices by introducing Treasury, i.e. paying 3%-5% per year on gold balance deposited with a weekly payout basis. But they are unlike to do it as many players donate to buy shares while they wold not donate to put gold in Treasury, it is not so appealing.
I am against comparing shareholders to oligarchs. Oligarchs have often gained their wealth because of connections with the rulers and because of breaking common human rights and market rules. Ingame shares have been given for free for about 20k players and it was up to players if they want to keep it or sell. Nobody sold it because hes/she was hungry in real life or needed money for operation. This is just a game, similar to Monopoly but with very long playing time reflecting human emotions, characters and ambitions and it not should be judget whether it is better to spend money on artifacts nor shares. | for Acean:
Paid ~11m to buy shares. Received ~2m gold through dividends in 2 years. Let's suppose earnings @ 1m each year indefinitely, that means you still need to wait 9 more years from now to break even (total of 11 years for 11m).
Now speaking of capital growth and your profit calculation, I do wonder. Is there a market for those 25 shares? Who buys those shares 9 years from now if you continue to hold them? While I can imagine that those shares will retain stable value on the market, I think that is a bit of a deceptive parameter to judge stability because the player base will inevitably shrink. Remember, we are talking about change over something like 9 years and even for this game, that is not exactly a trivial amount of time. I really appreciate your post but at the same time, I do think you won't find it easy to sell them comfortably at your estimated value at the time you want to make that decision which muddies this analysis. | | I suppose you are confident that you can sell those shares at 750k each at the minimum today. What I need to see is: Will people be willing to buy shares at 750k each in the future when you do sell them? I don't know when you are likely to sell them but I would be willing to bet, your plan is to let the dividends do their job slowly in which case you won't be selling them this decade :) |
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