That post you refers to answers none of the concerns I've raised.
I'll restate a couple of them for you. Feel free to have a go at answering it:
1. If FC were issuing profitable loans to BIG customers, why would BIG feel the need to issue options at all?
2. (a) If these options were not offered up as part of the transaction, would FC have provided the loans in the first place to BIG customers? (b) If not, then is BIG effectively helping to finance these loans through the issue of options on its own capital? (c) Is this sustainable?
As I've said before, I'm not making any accusations. This could all be possibly be explained away quite reasonably, but it could also turn out to be a real stinkin' mess.
Just sayin' the lack of information around these arrangements makes investing in this a real crapshoot at this point. I'm with Moelis on this one - cannot buy until the company provides more info. Here's a summary of their take on it in case you missed it:
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EVENT
- Our earnings estimates, rating and target price are currently under review, pending further information and clarity in regards to a recent company disclosure relating to a customer financing arrangement.
- BIG released an ASX market announcement on the 8th of February 2018 providing an update on the company’s relationship with FC Capital (Finstro) and its compliance with international accounting standards.
INVESTMENT VIEW
Our earnings estimates, rating and target price will be under review until further information is disclosed on BIG’s customer financing arrangements and our assessment of how this impacts BIG’s ability to grow revenue, and therefore our future financial estimates and valuation.
Our previous estimates and valuations are no longer to be relied upon.
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Good to see that Moelis won't let themselves get sucked into commitment bias and stick blindly with the stock as a vacuum of critical information emerges. Others are happy to keep the faith and trust management (kinda strange, given a key issue is the lack of disclosure from management). Regardless of the outcome, I think the right thing to do when this emerged was to dump the stock. Holding on in the absence of clarity on this is just a real crapshoot.