Last updated: 7th July 2020
It’s been a strange time these last couple of weeks.
The coronavirus has caused havoc in the real world as people have lost their jobs and economies have come to a standstill.
And we’ve not had football for what has seemed like an eternity already.
But the Football Index has continued to flourish in the absence of our weekend footy fix.
Media madness has kept our portfolio’s ticking over nicely, especially if you own the consistent media buzz holds.
And I must admit, for a brief minute or two on quite a few occasions during this period I’ve been left thinking…
Why haven’t the Football Index released any new IPOs or made any IPO announcements of late?
Then it hit me.
Like an avalanche, all the technical glitches and past mayhem on the platform came flooding back into my memory.
When I think of a Football Index IPO nowadays, all I can think of is chaos!
Over the past week I’ve seen a number of IPO related questions asked by new traders on the Reddit and Football Index forums, and so I wanted to take the opportunity today to talk about the IPO shenanigans.
I had briefly spoken about IPOs in my Football Index explained article, but I will talk about them at length in today’s piece.
So let’s get ourselves started…
What is a Football Index IPO?
I’ll simply quote the definition from the Football Index academy website:
“Initial Player Offering, or IPO for short, is when Football Index introduces new footballers to the platform and are available to purchase from the market.”
So essentially, new players who were not previously present on the platform are added and available to purchase at entry price.
Traders are informed 24 hours prior to an IPO launch, as the Football Index will announce the set of players that they wish to add to the platform, either via their dedicated news website or through their Twitter handle.
The IPO list that they announce will include the following details for each player:
- Player name
- Price Range
- Time Range
An example of a recent Football Index IPO list is provided below.
As per IndexGain’s post on IPOs, the Football Index determine the valuation of each player that is to have an IPO and popular players could be added from as high as £2.50 a share, whilst the less popular ones could be introduced from as low as 80p per share.
And as you can see, each player has a time range which is an approximation of the time at which the player will be added to the website and available to purchase.
There is also an element of randomness for each set of IPOs, as there is no particular order in which each player is checked off the list.
This means that if you’re dead set on purchasing a particular player, you would have to monitor the ticker throughout the day, but even then you will usually not be one of the first to purchase.
Playing the Quick Flip Game
The experienced traders often used IPOs as an opportunity to make a quick buck.
Most traders aren’t interested in holding most IPOs for the long term, as it’s far easier to purchase said player at as near the entry price as possible and market sell to those who were slower to the trade after a small rise.
This area of the market was exploited quite heavily as you primarily had to use the search functionality on the website or app to be able to find an IPO’d player.
You could also spot them through a flickering green colour displayed in the Top 200 or Squad lists, as the player who had just IPO’d would be flashing in green as he was being purchased in the thousands.
It was not an easy game to play for a Football Index beginner.
The general consensus was that the newbies should avoid IPOs as it was easy to get burnt by the experienced flippers trading this way.
More so, there has also been a sneaky suspicion amongst the trading community that automated IPO bots have been involved…
The IPO Bots Stealing our Thunder?
Yes that’s right!
The “fastest finger first” process to IPOs meant that the quicker you were at finding the player in question, the lower your purchase price on that player would be.
And people are usually very quick to exploit any hidden opportunities on the platform – be it rightly or wrongly.
It’s been suggested here that automated IPO bots (scrapers) have been in play, as they possess the ability to query the platform up to 100 times per second, which is a distinct advantage over a regular trader who can take as long as 5 or 6 seconds for a single check.
In retrospect, the process by which IPOs were released hadn’t seemed fair and as a result the Football Index have suspended them until further notice.
Now if you’re new to the platform (welcome!), I’m sure you’re probably have a bunch of unanswered questions like…
“Why did the Football Index suspend IPOs?”
“What event(s) warranted this decision?”
“When are IPOs set to return?”
I’m now going to answer a couple of these questions.
Let’s begin with…
The Japhet Tanganga Catastrophe
Mr Japhet Tanganga was a player in high demand on the day of his IPO announcement – set for Friday the 17th of January.
In fact, the phrase “high demand” is a massive understatement.
So many people were after the Tottenham youngster that the platform crashed after his IPO announcement as a result.
Plenty of traders managed to snag thousands upon thousands upon thousands of shares at 85 odd pence.
However, there were a few traders who were left fuming at the prices they acquired him at.
You can imagine, lots of traders instant selling very good holds to beef up their cash balances in preparation for this IPO, only for some of them to end up buying at prices like this.
It was quite a bizarre day on the platform.
If on the day you were one of those traders “caught in the crossfire” so to speak, Football Index did save your bacon as they offered refunds for those that purchased Japhet Tanganga above a price of £1.57.
However, the traders who bought below this price would have either had to wait a few weeks for the instant sell facility to become available as the market sell queue was – and still is – absolutely gigantic.
To this day there are traders who have their shares in the queue having listed them on the day of his IPO, with the massive rises they made on him on IPO day all but vanished!
And he’s fallen to 93p at the time of writing!
I personally jumped on the Japhet Tanganga train at £1.22 a few weeks after his IPO, and have bought a few dips along the way leaving me with 400 shares at an average buy price of £1.20.
My belief is that his price will recover in the summer once the new season approaches, and I draw comparison to Tariq Lamptey – a player with a similar sort of profile – who is currently trading at £1.65*.
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Funnily enough, the IPO chaos doesn’t stop there.
Adil Aouchiche – a highly rated French youngster – was another player that brought about the same problems on his IPO as well.
The Adil Aouchiche Mystery
This player marked my third foray into the land of IPOs.
And I got very lucky (well many others did too).
Adil was set to IPO on Thursday 30th of January between 10am to 2pm.
I remember being curled up in bed browsing through the Index Gain slack channel and recall someone mentioning him as highly talented player who was one of the standouts in this set of IPOs, along with Birmingham City starlet Jude Bellingham.
I figured why not, I’ll get involved with a small stake and see how it goes!
So I purchased a small 75 shares on IPO day.
I managed to get in near the basement price as I acquired him at £1.40 a share on the day of his release.
Adil Aouchiche’s price behaved in a similar way to Tanganga’s, as so many traders were able to purchase thousands of shares at £1.40.
I watched minute by minute as the situation unfolded.
With Mr Aouchiche’s price stuck in limbo I figured what the heck…
So I instant sold a few more players who I thought would be better off shifting. These were:
- Nuno Tavares
- Lars Stindl
- Ruben Rochina
- Felipe Caicedo
- Dusan Tadic
- Denis Cheryshev
- Michel Herrero
And I then acquired 300 more shares of Adil Aouchiche in 5 separate transactions…
This is a player who is widely regarded as one of the best young talents in France, and draws a lot of price comparisons to Eduardo Camavinga who after IPO’ing has appeared to have settled at around the £3.20 mark.
The opportunity to get on at a price this cheap was simply too good to pass up.
And I think I did quite well here (sincere humble brag).
Now I’m unsure whether the decision to instant sell the aforementioned players was mathematically justified, as there’s just too much number crunching for me to work out there and I don’t really have the time.
But on the balance of things I think it turned out well.
I have a player who I am very happy to hold for the long term who I was able to acquire at a reasonable price altogether, all while managing to get rid of players who I thought wouldn’t rise much further than what I acquired them for.
As it turns out, I was only massively wrong on Stindl, with the rest pretty much stagnant, 2p or 3p up or a fair bit lower than what I bought them for.
I intend to sit on this Aouchiche trade a lot longer as the player’s future at PSG is in doubt as his contract is set to expire next month.
Rumours suggest a move could be on the cards although he could sign a new contract and all would be merry.
It remains to be seen how the situation will ultimately pan out with this lad.
Looking back on it now though, the chaos that ensued on that particular day was wild.
Football Index didn’t even get to IPO Matty Cash – another talented player that traders were very eager to purchase – because the whole platform crashed and became temporarily inaccessible for many on that fateful day.
What next for IPOs?
In the Football Index video below, Adam Cole alluded to IPOs being relaunched in May in a new format.
It’s critical that the Football Index launches the auction-like system smoothly so that they can get back to releasing new players onto the platform more frequently.
At a minimum, every player from every eligible league needs to be available to purchase as in its very essence, we’re supposed to be able to profit from our footballing knowledge.
What good is that knowledge if we spot a talent but can’t capitalize on that simply because the player doesn’t exist on the platform?
It doesn’t bode well for a platform that prides itself in being a football stock market.
IPO news at last!
At long last the Football Index have provided traders with some IPO news.
Schalke 04’s Ahmed Kutucu, Bayer Leverkusen’s Edmond Tapsoba, Leeds United defender Ben White and Bayern Munich’s latest signing Tanguy Kouassi have all been added to the platform.
We expect the IPO schedule to pick up some steam as the platform continues to fast track its move towards a NASDAQ powered order book system.
IPO dates and times are still being released on their dedicated news website which can be found here.
To end on a positive, the future of the Football Index is shining bright as the platform has navigated this trying period quite well with the media madness promotion and the widening of player spreads to curb mass instant sell offs.
Let’s hope they can get the IPO process sorted out as soon as possible so that as traders we can get back to enjoying another element of this fantastic platform that we love.
*Prices correct at the time of writing