In their August 30 blog post, the Empire Avenue development team explained that there would be a change to the way earnings (dividends) are calculated for those influencers that have upgraded the number of shares they have available.  This change will have a dramatic impact on  Empire Avenue’s share price leaders.

Next, reducing share dilution.  Currently, as you increase the number of shares you have available the dividends you pay out per share drop a corresponding amount.  This is because the total amount of dividends you payout does not increase. So, by the time you have taken your available shares from 10,000 to 20,000 the dividends you are paying for the same amount of activity drops in half.

With the Erindale update, the total amount of dividends you payout will increase.  The Empire Avenue team have said the increase will be significant, but will not be one-to-one. This means that dividends per share will still drop with each share increase, but not by nearly as much.

It is safe to assume that those already with several upgrades behind them are going to see a significant increase in the dividends per share they pay out.  (Those with the initial 10,000 share allotment will not see this change until they buy the share upgrade.) You can expect people to become more interested in the stocks of those on the leader boards for one of two reasons:

1. Some people, don’t pay much attention to relative dividends.  They will simply see a big increase in the dividends they are getting from some people and decide to buy more of those shares because of it.
2. Meanwhile, there will be some amongst those that pay more attention to dividends that will acknowledge there is still partial dividends per share dilution, but now feel this change makes buying share price leaders more attractive for any other advantages these top influencers provide.

In addition to increased buying of these influencers you can expect to see reduced selling. While the change will have a lasting impact, it is likely to make the biggest difference in the short-term.

The chart shows the number of shares available for each of the 45 top influencers by share price as of the evening of September 5.  Today, the best value are those with a small number of shares outstanding if activity were equal.  While in theory this will still be the case after the Erindale update, there may be a rush to buy shares that makes owning those with many outstanding shares desirable in the short-term.

What changes if any are you making to your investment strategy given the new earnings/dividends calculations?  Do you like this change?

Related posts:

1. Finding High Yield Dividends – Part 3
2. Demystifying Dividends on Empire Avenue
3. Finding High Yield Dividends – Part 2
4. Finding High Yield Dividends – Part 1
5. Breaking News: Increased Focus on Engagement – Part 1