Football Index in liquidity talks
Football Index traders have been left furious after a change to the site’s terms and conditions triggered a major market crash on Saturday morning which has trapped their money in the exchange.
The Observer reported in January that Football Index, the self-styled “stock market of football”, suffered a series of price crashes on its exchange – where users can buy and sell “shares” in footballers and receive “dividends” based on their performance.
Prior to and following the announcement, player’s prices have been dropping and investors have seen their portfolios crash in value. This is most damaging for more recent players to the platform who have invested when share prices on players were high but have now dramatically fallen.
According to a statement issued Monday, Football Index said: Over recent months, Football Index has sustained substantial losses. The Board agreed a recovery plan aimed at stemming these losses whilst retaining the dividend payments at current levels. It was hoped that this would stimulate a market recovery which would allow for the higher dividend to continue to be paid prior to the normal annual review, and for an exciting and affordable Dividend to be announced at that time. The issuance of new shares and IPOs were key deliverables of that recovery plan, amongst other initiatives to rejuvenate the market.
Our team worked hard to deliver against that recovery plan. We made increased efforts to maintain the levels required when they were at risk. However, it became clear that important KPIs of the plan were not being sustained to a level that would support the ongoing payment of dividends at those levels, despite substantial progress being made against those objectives.
While the Board worked to form a new plan to retain the maximum sustainable level of dividends, the Board decided to continue business as usual until a new plan was agreed and adopted, on the basis that the Board considered that this would be less disruptive to, and in the best interests of stakeholders. Once it was clear that the reduction and restructure of dividends to the degree announced was necessary, we suspended placing issuance orders and announced the reduction and restructure to customers as soon as reasonably practicable. We will notify customers if and when these are put into operation again. There was no intent to mislead customers in these transactions, or in the announcement of a Q&A session.