In a blog post, the Empire Avenue development team has announced that dividend calculations will continue to be adjusted after the major changes in Wednesday’s Erindale update. In the post, Duleepa Wijayawardhana (Dups) said, “Increasingly, our dividend and earnings payouts will also be based on the soundness of the Empire Avenue economy. We are doing this to ensure that both our economy and site are around for you to enjoy now and for a very long time in the future.”
Next, possible motivations for further adjustments.
With the Erindale market maker updates, those with many outstanding shares saw huge increases in total dividends paid. Share price leader Adriel Hampton (e)ADRIEL saw his daily dividends paid rise from about 9,500 eaves to almost 48,000e. Meanwhile, many of those without share upgrades and less expensive stocks such as Aaron Ball (e)BALL would not have noticed significant changes.
The goal in providing more dividends for those with many outstanding shares is to avoid harshly penalizing investors in top stocks when the Influencer makes more shares available. In instituting this change, Dups said, it “will ensure that, as long as you continue to produce *quality* content, you remain an attractive investment for others.” It’s fairly safe to assume that the Empire Avenue team wants to make sure they strike the right balance in how many dividends top performers produce. This is not something that is easy to simulate in advance. The development team can predict how many dividends different members will produce, but they cannot predict our reaction to those amounts. People may have looked at the changes and said it wasn’t enough to change their investing strategies. Conversely, people may have decided they need to move more of their portfolios into top producers.
While either scenario is possible, the moves of several with top share prices on Thursday could suggest the changes went a bit too far. Those on the share price leader boards were up significantly on the day. Some saw their largest increases in some time. Of course, today’s buying of share price leaders could also be because of a feeling that they are inexpensive after the share price adjustments. Only time will tell and this is the reason that Dups said they will continue to adjust the numbers. So far though, it appears that dividends have dropped somewhat for most people.
In addition to adjusting the dividend payouts for those with many outstanding shares, the development team could also be looking at the factors that go into determining dividends. As EBN has reported previously, dividends are now determined from a mix of activity, audience size and audience engagement. This mix could need adjusting in the days and months ahead.
With any good incentive-based system you want to reward both those that work hard (activity) and those that are successful (audience size and engagement). You walso want to reward those just starting out and those that are on top. Creating one system that balances all of these things is tricky. It’s not surprising that the dividends will continue to need tweaking.
So, what does all that mean for you as an investment and an investor? Just to keep an eye on how you and your investments are doing with dividends and adjust your strategy when needed. This latest announcement from the Empire Avenue development team does not indicate how changes are being made. Therefore, there is little you can do ahead of time. As always good advice; as an investment, produce great content that will interest others and interact with them; as an investor support people that produce great content that you like. Above all — have fun, get to know people and be supportive to the community. If you do, your wealth and share price will likely take care of themselves.
Any thoughts on the latest announcement, or on recent dividend payouts?