You Will Still Love Me at 80 with the Secondary Market

Posted on July 13, 2010 by William Pitcher

When I was in the teens share price wise, people bought me as one of those Recent Arrival bargains.  When I was in my 20s, I was moving up the recent arrivals leader board and drawing buyers even more quickly.  I raced through my 30s and 40s with people buying me because of how fast I was going and because my blogging was taking off.   By my 50s, I could sell out 2,500 shares in a day and then market maker bump happened.  I am now the fourth most expensive share on Empire Avenue as of writing this, and yet people still buy my shares.

Next, why today’s 70 is tomorrow’s 80.

If the only way to buy my shares when I was in my 20s was to pay 30eaves would you have?  That would be a big gamble.  However, what if you had talked to me, learned about the commitment I was making, realized the opportunity I think Empire Avenue presents as a major internet platform?  What if I shared with you my plans for the Empire Building Network?  Then, by the numbers anyway, paying 30 for those shares that are now worth over 65 becomes a pretty smart move.

Well you have that opportunity again.  It’s hard to buy my shares now.  I am sold out most of the time, and I have bought the last share upgrades available at least for the moment.  However, there is another way to buy my shares — the secondary or third-party market.  This secondary trading system, in case you are not familiar with it, is available any time you hit a person’s buy or sell buttons.  All you have to do is put in how many shares you want and at what price you are willing to trade them.  That offer will stay live for an hour.

Now, there are all kinds of problems with this system.  Adriel Hampton does a great job discussing what is needed in a blog post at Game Mechanics.  One of the ways to get more juice put into fixing the secondary trading system is for us to use it more.    Plus, even though it doesn’t work very well, buying shares their of good investments is still very worthwhile.  If I am heading to 80, so what if you pay 70 now.  If I have shares on the primary market at 80 people will still be buying them.  So, 70 is really not so bad, especially when you consider where the demand to buy top stocks.

Don’t believe me that this is demand?  People like Josh and Fray are cajoling people all the time to sell their shares, and they have a hard time with it.  I ask my friends to sell me all the time, and most of the time they don’t want to.  Why do we all do this?  We want the cash that comes from somebody new buying them. Again though, it’s not easy because people want to hold on to our shares.

So, I have a challenge for you.  Go offer to buy a leader’s shares for several eaves more than his or hers current market price.  Pick a small number maybe 10 to 25 shares.  Get a feel for the system.  You will still be getting a bargain.  And, for those that need some cash, start looking for those deals.  Let’s juice the secondary marketing so that the Empire Avenue team makes it better.  In the end, we will have a more interesting game.  Along the way, we can make some good money.

I will go a step further too. If you do a buy on the secondary market for at least a few eaves above my current share price.  I will do the same with your stock.  All I ask is that you let someone I know or someone that writes for the Empire Building Network know when the deal has gone through.  The notification system for secondary trades is pretty screwy.  I just want to try to track our progress.

What do you think?  Have you use the secondary market?  What do you think of third-party trades?  Can we make the secondary market an exciting part of the game if we start using it more?  Will their be an advantage to those that know how to use it from a strategy perspective if Empire Avenue makes improvements for the public launch on July 20th?

Related posts:

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  3. Five Things I Love About the Chilean Invasion
  4. Breaking News: What Do the New Market Makers Mean?
  5. Unmasking the Market Makers

About William Pitcher

Bill is the founder of the Empire Building Network. He hails from Mississauga, Ontario, Canada just outside Toronto. For 23 years, Bill has been a fundraising consultant helping charities across Canada and in Europe conduct major capital campaigns. He is a total tech geek that took to Empire Avenue and blogging like a fish to water.
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  • http://twitter.com/joshbazin Josh Bazin

    Once individuals sell out, they really need to start thinking about how to change how they're playing the game – you've got your inital cash inflow from your IPO, now you need to start buying/selling others to make your money. The game is changing and that is pretty exciting.

  • William Pitcher

    The only way to create in day share price movement is through the secondary market, but just remember, buying and selling on the primary market makes you immediate cash.

  • http://www.empireavenue.com/daring DARING

    I'm not sure how I feel about the secondary trading market, on the negative side, it's mostly because I've seen some cases of abuse with it, and there doesn't seem to be much of benefit for the actual person whose stock is being traded, whether they are sold out or not as they don't see any profit from the sale and the effect on their stock value is still somewhat of a mystery. On the other hand, it does mirror the real stock market, which is an aspect I think is intriguing.

    So far, I have used it just for fun, selling “limited edition shares” of people who sell out, the 12,500th share of (e)Miller and the 17,500th share of (e)POOKA, for example at 30% above their actual market value. Buyers also received Unicorn Encrusted Commemorative Plates. No takers, but the tweets were fun for me, and hopefully others.

    I have chosen not to use the secondary system primarily so that the folks whose stocks I buy receive some benefit. And with some attentive monitoring, lucky timing, and quick action I've managed to acquire any number of shares of a sold out stock that I desired. For example, it took a few days to get from 2 shares of (e)Pooka to 300 shares, but it kept me engaged in the game, as yet another way of playing.

    I think the trading system has some potential, once the kinks are worked out and trades become equitable for all three parties involved – the buyer, the seller, and the Stock originator. And realizing that EA is still in beta, I'm thinking I'd be pretty safe in assuming the EA team is taking all the feedback pretty seriously so they can continue to improve the platform and service they are providing.

    All that being said, *if* you want to try out the trading system, you might find it is cumbersome as you can only post a trade for 1 hour. The folks behind Sharedeck.net have started a community to help facilitate trades with a longer “viable period.” Consider joining. Once the kinks in the secondary trading system get worked out, it might be *the place* to be. http://www.empireavenue.com/community/page/disc…

  • William Pitcher

    Yes, in a way, I am only shooting myself in the foot with the offer I made. Especially given that I actually have a few shares available at the moment. But the EA folks have said that secondary trading is not that popular. I would like to see them improve it. If we can put some juice in the system, I think it is a good thing.

    Again, primary selling can give you cash, but you can move share prices with the secondary market.

    When you say abuse, I take it you mean people in collusion. To be clear, I am not interested in that. I enjoy having a high share price to be sure, but I am not looking to abuse a system to get there.

    I think this is a good dialogue, thanks for your comment.

  • JoanneYCostello

    Bill, good post.

    Doug, I think Share Deck Auctions is working toward making some of the trading more transparent: http://www.empireavenue.com/community/page/disc…

    I have confidence that Nelson can develop and website/app to use also until EA gets things fixed.

  • http://www.empireavenue.com/daring DARING

    Don't worry Bill. didn't mean to imply that you were condoning abuse. I know you well enough, I think, to know that you wouldn't stand for collusion. In fact, with your dedication to EA and it's potential, I'm pretty sure you would use your influence to help put a stop to it.

    The things I observed occurred several weeks ago. The involved players, when confronted, gave plausible explanations, despite what the perception may have been. Though, as far as I know, they also were suspended from the game or voluntarily withdrew from gameplay shortly thereafter.

    Since that time, nothing has changed in the secondary market, as far as I know, to prevent a similar situation, which leaves me wary of the system, especially with the vast influx of new players.

  • William Pitcher

    Thanks for that Joanne, I wasn't sure whether to plug the ShareDeck auction system in the main post because I know Nelson is working so hard on it. However, it is definitely good to mention – and getting better every day!

  • http://twitter.com/joshbazin Josh Bazin

    Perhaps the way I'm looking at #EAv is a bit different than some of the others here. I'm seeing two 'games'. The first game is to convince people to buy your stock and for you to create value in said stock. I think the recent Market Makers adjustment reflects this – if you engage your audience, your price should increase. Quality of your posts is better than sheer quantity.

    The second game is a stock-picking game. You generate your initial cash from your IPO, then you need to make judgment calls on when to buy/sell stocks to continue to see cash inflow.

    With that said, I think there are some improvements that could be made to both sides. First, you should be able to buy your own stock back and/or issue splits and that sort of thing. Secondly, IPOs probably are starting at the wrong prices. Perhaps a week or something as a 'private' influencer to let individuals get a sense of the activity and give the system the opportunity to judge a more reasonable price. Alternatively, allow individuals to set their own initial offering price. In terms of stock trading – there should be a better secondary market, which it appears there are tools being built to provide that.

  • http://twitter.com/joshbazin Josh Bazin

    I'm not sure there needs to be any money going to the originator of the stock on the secondary market. Much like the real market, outside of the IPO, the originator of the stock doesn't see any money from the trades going on in the market. With that said, #EAv should allow individuals to own their own stock – to profit from their stock improvements if they so wish.

  • http://www.empireavenue.com/daring DARING

    I think you're spot on there, Josh. Being able to own your own stock would make EA more realistic, and as an added bonus, make the secondary trading system more equitable, as one could trade and buy their own stock back, then re-release it onto the open market, or hold it for their own profit, like you said. Though, without some really good controls, being able to own your own stock would reeeeaaaalllly open the door for abuse/collusion. It's a catch 22.

  • http://twitter.com/CoreyTyhurst Corey Tyhurst

    In a market thats about to be opened up, almost anyone with some consistent activity is a bargain.

    We're dealing with a small number of overall traders; imagine the demand for well performing stocks once there are thousands more people flooding onto the Avenue. I'd compare it to emerging markets in the real world, but then I wouldn't have anything to blog about!

    If you take a look at the Market Makers now, these are likely your “Blue Chip” stocks of EAv. As a wise man once said:

    “Get while the getting's good”.

  • http://twitter.com/adrielhampton Adriel Hampton

    In response to my comments, Dups has mentioned that the EA team is hoping that third-party developers will create improvements to the trading system. Meanwhile, like Bill, I am a bargain on the secondary market at 79 or so. I plan to open at 100 on July 31.

  • http://twitter.com/joshbazin Josh Bazin

    I would forsee some issues, much like the real market has issues regarding collusion. I think the share ownership limits really do prevent significant abuse. There would need to be some sort of 'cool-off' period for individuals between the buy back and reissue. I would also forsee some sort of disclosure required – much like a CEO of a publicly traded company would need to give.

    For example – let's say that a particular individual knows they are going on vacation (and want to sell their shares prior to that) – I would say that this desire should be announced to the market prior to the transaction, which allows all individuals the opportunity to sell with the same information – to ensure fairness.

    It could be that I'm looking at this way more in depth than it needs to be – but I think EAv has something here. It really could give (companies, especially) a great (and different) way to interact with their consumers. I do think that we need more people selling out of their stocks and more secondary market movement to see what the issues are so that changes and controls can be implemented to make EAv amazing.

  • http://twitter.com/THETOMRIDDLE Lord Voldemort

    Here is a problem I have with the whole limit at 20,000 shares. The game is virtually over for players. It no longer becomes fun for them and they lose interest. In the real world, it is about making money. In this game, it is about sustaining activity and trying to raise your share price and continuing to get to the next level. When you run out of levels, what is there left to do?

  • http://twitter.com/joshbazin Josh Bazin

    The artificial cap on share numbers should be removed. I don't disagree with the cost to upgrade to the next level – that's the reality of issuing additional shares, it costs money to raise money in that fashion.

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