Friday, June 10, 2011

Understanding Your Empire Avenue Share Price

Yesterday, I wrote an article on "How To Increase Your Empire Avenue Activity Score." As a result of the article, I received a number of comments about my strategy. Some, like Berrie Pelser and Dr. Ron Capps, adopt the fewer purchases but in larger amounts methodology. Others, like Alan Jobe, believe that buying and selling does nothing for the activity score. Alan explained in the comment section that "it is the shouting and not the buying that is EAv activity."

The welcomed feedback caused me to dig a little deeper into the gaming platform. More specifically, I wanted to understand the activity score and its relationship to the share price.

To begin, I clicked on my share price and found the following explanation (as seen in the image above):
(DLN) Share Price Breakdown
Social Media Component: 60%
Shares Component: 40%
The social media component of your share price, and especially your Influence Scores, are based on your long-term activity trends on up to 5 of your most active social networks, including Empire Avenue. Heightened or depressed activity on any given day will likely not have an immediate effect on your Share Price or Influence Scores, but sustained activity and sustained engagement with your networks will see steady gains.
As I understand it, 60% of my share price is determined by the "long-term activity trends" of my social networks. The other 40% of my share price is then determined by the investments in me. Is that a far assessment?

On a related note, Marieke Hensel noticed that her share price breakdown had different percentages. She posted in the comment section a split of "Social Media Component 70%, Shares Component 30%." Why was it different?

To answer, I turned to Chris Pirillo and Anabel Barbosa.

As seen in the examples above, Chris' breakdown puts the split at 39/61 while Anabel maintains an 88/12 split. Why are they different?

Based upon my cursory review of both accounts, Chris has way more outstanding shares than Anabel. According to their profiles, Chris has sold 394,135 shares, while Anabel has only moved 571 shares. To me, it makes sense that an Empire Avenue (EA) newbie hasn't convinced enough investors to count. Therefore, while Anabel sells her stock, EA will place more weight on her social media activity. On the flip side, Chris has a huge number of stock sold. It makes sense that his share price is largely determined by his outstanding shares over his activity.

NOTE: Both social media activity and shares outstanding make up the total price. One will not do as well if they ONLY focus on a single component.

With that written, let us examine the Activity Score. To better understand our activity, we only have to turn to our index ratings. In the "Leadership" Index, where I have been demoted to a Vice-President, my current activity score is a whopping 273.9 (Unfortunately, it fell while I was away camping).

How is the Index Activity Score calculated? Check the screenshot below:

In summary, the Empire Avenue share price is determined by the social media activity (output and engagement) as well as investments in us by others.

So, what do you think? Does this make sense? Does this help explain how to increase both activity scores and share price? Let me know your thoughts in the comments section below.

Update: A special thanks goes out to Ryan J. Zeigler for helping me better understand the "Share Component." Thank you, sir!

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Damond L. Nollan, M.B.A.

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