2 Cents by June 2022, page-72

Hi @DanMachine

I don’t mean to deflect but I think you need to spin the AG Code question around: what evidence is there that IOUpay will be able to benefit or use it in their own operations? Everything we read makes it clear only two licenses have been issued. It was issued to IDSB, for IDSB to use in their own operations. Just because IOUpay have a non-controlling ownership of IDSB does not mean they can magically repurpose the AG Code for their own operations; they’d need approval for this.

As for the second question, re: cash in the Jan-Mar quarter, I think I’ve made my points already. The question is moot, because in my view they should have a) already sorted wholesale funding well before now, or b) advised the market well in advance that they were not able to attract a lender and we’re going to continue with their own cash balances for now (that would have allowed shareholders to make an informed choice about whether to keep holding).

FWIW I’m starting to wonder if they realised mid-last year that funding would be a challenge, so they bought into IDSB thinking it might improve their chances. I still can’t fathom why they did it, and so far despite what any of the bulls here might say, it’s only created headaches for everybody:

- committing that cash elsewhere has limited BNPL growth
- profit expectations fell short (whether justified/explainable or not, they still fell short)
- they still only own 21%
- it’s yielding just a 2.5% return thus far
- they’ll likely have to raise capital to pay the rest
- they haven’t started any BNPL cross-selling yet (!)
- they still don’t have external debt funding

You present your points very well but I’m bemused as to how you can still view this acquisition as value-accretive for shareholders. For me it’s one of the biggest own-goals I’ve seen a microcap pull off, hence my ongoing interest!