Ann: March Quarterly Activities Report, page-222

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kevin103

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02/05/22

15:43

Post #: 61150571
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Originally posted by mondyinvest: ↑

"It's a *good thing* that they ran out of money for BNPL. It means the product is in demand, you see? I think that's a pretty conservative move by management."

Just when you think you've seen it all...

Sorry, but this is absurd. Management are supposed to be capital allocators. It’s literally their job to grow the business whilst managing cashflow in/out. Running out of money and slowing operations is not 'conservative'. Product demand is not good if the demand overshoots your ability to deliver the product because you spent the money in the wrong places. If they have to flatline the book till the end of the year, that's a free leg up to their competitors (note they actually made reference to increased competition in the report as well). It is even more wild considering they raised $50M to fund the app development/marketing/receivables book, then seven months later committed 80% of this to an acquisition that to date has delivered almost nothing in returns. Yes, it won’t turn out being $42M, but of the $21M they’ve currently paid, what has the return for shareholders been? The quarterly said “a pilot programme is being developed to market myIOU's BNPL services into IDSB’s high credit quality customer base”. Think about that critically for a moment, because IDSB is the main reason they’ve run out of funds: it’s been five months since they paid A$21M to get their 21% holding and they’re still developing a pilot programme? What have they been doing all this time (apart from hiring truckloads of staff)? To date there’s been two dividend distributions totaling $533,333 – so far, for their A$21m paid they have got a 2.5% return on the initial outlay. Read the IDSB section carefully, any future dividends are discretionary, not guaranteed. When you weigh up the fact they committed a huge chunk of capital to IDSB for a 2.5% return to date, which has resulted in them having to effectively halt their BNPL operations which deliver 5.1% per month, they get a big fail mark for capital allocation.

I’ve read some strange things on these threads, but trying to spin running out of cash as a good thing has to take the cake.

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Yes I agree about the cash position.

Only logical explanation is that bnpl is just a side hussle for IOU...?

If that is the case, what is the main state of play with IOU now ?

Last edited by kevin103: 02/05/22

IOU Price at posting: 11.5¢ Sentiment: Hold Disclosure: Held
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