Ann: Company appointment of new Chairman, page-70

Positives? I can see some:

* They will re-list. They are restating accounts so that they are compliant with ASX rules. Regardless of ASIC outcomes they will be able to re-list. I think the share price will be hammered horribly, but they will re-list.

* They will break free of the FCC arrangement (letting FCC realise their returns) and move to the US for the next stage. I had expected Europe with the UK/Russia broker and now the Russia finance expert joining the board, but seeing as he leads a recently created fund in the US (back by Russian money) I think they will try to establish an FCC model in the US and run this for another year there (the FCC $20m was burned through in one quarter and the burn rate in the large US market will be much larger so I don't expect it to last much longer than a year). Maybe Europe/Russia after that.

* Despite the likely restatement of rev rec and what that will likely do to past revenue numbers, I think they will come up with another plan for recognising unbound customers in the US. The key is limiting the exposure of the financing company to loss, like FCC achieved. What that structure is, I don't know, but it will provide an opportunity for shareholders to escape.

* Speaking of escape, large holders in Aus (and the new ones inevitably coming from Europe/Russia) will want to realise the gains they saw evaporate in the new year. So I expect a revenue/growth path that will allow that to happen. It's impossible to set a price, but I bet there will be a $2.50 escape point sometime in the next 18-24 months just off the value that was at the fingertips of the big holders and how much they were almost able to grab.


Those are what I see as the positives from this announcement.