FDJ SHARES – After a highly noted IPO, the FDJ share remains below 22 euros. Find in our article all the information on La Française des Jeux.
[Mis à jour le 05 décembre 2019 à 10h32] November was marked by the privatization and the listing of La Française des Jeux on Euronext. Over 500,000 individuals have subscribed to FDJ shares. The first day of trading was marked by a sharp increase, the stock exceeding 23 euros per share during the very first minutes of trading. The increase in the FDJ share is partly linked to the priority given to small savers (orders of less than 2,000 euros were also served as a priority), to the detriment of institutional investors. Clearly, the latter could have come forward more to buy stocks, so that demand was greater than supply. Another determining factor, a limited offer. Small savers are encouraged by the State to keep their shares (at least 18 months to acquire one for free after having acquired ten).
Since that first day on the stock market, the FDJ share has dropped below the 22-euro mark, a price that remains high. Indeed, small investors may be tempted to sell their shares for pocket the added value, at the risk of losing the benefits promised by the State. As a sign of the interest in this operation, the company announced the release of a package of additional securities on Wednesday. The IPO of La Française des Jeux has become the largest operation in France since Natixis in 2006.
On the eve of the FDJ’s IPO, the share price of La Française des Jeux was set at 19.90 euros for institutional investors and 19.50 euros for individuals by Bruno Le Maire. As a reminder, the latter benefit from a discount of 2% on the price. The purchase of ten shares, and their conservation for eighteen months, also makes it possible to acquire one for free. These incentive systems are intended to bring small investors back to the stock market, after having deserted it after the 2008 crisis.
This is the question posed by many small investors who have bought FDJ shares. Indeed, the FDJ stock has certainly dropped compared to the first day of trading, but the price remains high. It is however advisable to avoid the “stock market hit”: La Française des Jeux is considered a return value. By choosing to sell, you risk losing the advantages granted by the state.
As the Boursorama website said recently, it is advisable to set management objectives – up or down – when you hold stocks to see more in the long term, and do not panic as soon as the price is up or down. For example, you decide to sell a security only beyond a certain gain or loss.
Individuals cannot buy La Française des Jeux shares as they see fit. It is imperative to hold a stock savings plan (PEA) or a securities account. To do this, you must turn to your usual banking contact. If you hesitate between these two products, know that with the securities account, you can acquire shares of European and foreign companies. The PEA does not allow this, but it has more attractive taxation. Once you have made your choice, you must place a purchase order with the following information:
Direction of operation : the purchase,
Company Name : the French Games,
Mnemonic code or ISIN : FR0013451333,
The market on which the stock is listed : Euronext Paris – compartment A,
The quantity of shares you want to buy,
Period of validity of the order.
As mentioned earlier, the FDJ is often considered a yield value. It has recurring dividends and its activity, focused on gambling, is weakly influenced by economic conditions. La Française des Jeux has several figures in its favor. The company boasts uborn average growth of 5% bets per year for 25 years“and bet on 16.9 billion euros in stakes in 2019, up 7% compared to last year.
“More than the share price, we should look at the dividends“, insisted Philippe Crevel, director of the Cercle de l’Epargne, at Linternaute.com.”The added value should be seen more as a bonus“.
The risks to which one is exposed when buying FDJ shares
As Le Revenu noted, the title of La Française des Jeux confirms for the time being its yield value profile, resistant to the volatile nature of the stock market. Between November 21 and December 3, the FDJ share lost 0.80%, notes the magazine. Before investing, it is therefore advisable to look timing and share price. As Boursorama reminded us, a downward movement is not necessarily a sign that we must jump at the opportunity and acquire shares immediately. The reasons for a decline, and therefore the disaffection of investors, can be multiple. If you are new to the markets, be particularly careful and thoughtful.
In addition, La Française des Jeux will have to fulfill 380 million euros to the State to maintain its monopoly. The company will certainly have to borrow, which will weigh on the bottom line and, ultimately, on the title. There are also longer-term risks. In the registration document (382 pages long and approved by the AMF) which you can consult here, La Française des Jeux lists a series of risks. In detail, the operator considers in particular that a evolution of the regulatory framework for example could harm by “putting constraints on its growth strategy” or “affect [sa] ability to recruit new players. ”
In this case, how to limit the capital risk? Experts recommend diversify. Clearly, if you start, it is advisable tobuy shares in other companies, in addition to those of La Française des Jeux. The Boursorama website therefore recommends thata line does not exceed “20% within your portfolio”, but also not to focus your efforts on one and the same sector.
Also be wary of any business information you have from a friend or loved one. A “good tip” that pushes you to invest can constitute a insider trading. The latter is liable to a fine of up to 1.5 million euros and a prison sentence of two years. If the information in question is false, you expose yourself to a risk of high capital loss.
Through the privatization of La Française des Jeux, the State wishes to fund a fund dedicated to innovation and industry to the tune of “1.8 billion euros”, said the Minister of Economy, Bruno Le Maire. As a reminder, this operation was carried out under the Pacte law. This law was definitively adopted by the Parliament in April, thus allowing the transfer of the majority of the capital to the private. As a reminder, the State remains present in the capital of the company, up to 20%.
The privatization of La Française des Jeux could pay off up to 1.9 billion euros to the State, during the initial public offering scheduled for Thursday, November 21. After privatization, the state will continue to pocket tax revenue estimated at 3.5 billion euros per year. The dividend, for its part, will fall de facto since the State’s participation in the capital will drop to 20%. As an indication, the State received 87 million euros for the 2018 financial year. CEO Stéphane Pallez said that the next dividend paid to all shareholders this year will be 122 million euros. “We will not make shareholders pay the costs of the privatization,” she said.