$1 Club, page-30856

>What is the point of this question? It was 2016!
The point is that a companies value can have nothing or everything to do with its profitability. To assume that a company will fail/ close the doors because of a lack of profit is clearly not necessarily rational.

>Dan, I think you're stuck in a rut thinking this is a lending business and not a BNPL
They call it BNPL, but as I said, clearly they are interested in being credit conservative. And, no, it's not a lending business. It's a "get your little fingers into every transaction" business.

As you mention, BNPL is trashed. In Aus, soon to be regulated I am sure of it. In Malaysia, definitely going to be regulated. Malaysia, definitely different view of credit and money compared to Australia.

Will it be possible for myIOU to offer the volume that other BNPLs have? Heck no. Because they apply *discretion* to applicants. But they also won't lose as much money.

And so, yes. Why would they bother with IDSB? They could just have bought a database to market to. They want a *vetted* database.
And the user database is just one benefit to them. I read their reasoning for purchasing IDSB a few times and I don't think it's a bad deal.

> it was a very poorly timed / planned purchase
I think this is correct. Given market sentiment doing it at this time was a mistake for a publicly listed company. But, practically speaking, what was their other option? Churn more through BNPL? Regardless they were going to tank, because they're small already and their profit modelling is low value, high volume. There is no way they could take the 50 million they had at cap raise and turn it into something solidly profitable in the time, I think.

Even in other industries, I think right now you're going to find it hard to find any company that had 50 million a year ago that's giving investors good feelings regarding their profitability. Do you have an example, something relatively small given the opportunity to expand that has been successful in their shareholders view?

> It's been long enough now for them to prove otherwise, and they've not done that
I can only really guess that they did not know that the PBT would have so much of a variance.
The majority of the shares IDSB purchased come directly from the executive chairman's personal holdings. Now, he agreed to the deal which means his underlings assured him that PBT was close to 10 million. Consider the personal loss to him and what that might mean for the sentiment internally and between the two companies.

The idea of what "shareholder value" is will necessarily change given the general financial situation. No one wants to takes risk, fair enough, they want to keep their savings somewhere.

Again, I'm not arguing this is a "buy", no company is a "buy" really since we have no idea how anything is going to reorder. However, I don't think that its a good idea for current investors to realise their losses.