Good summary mate. One of the many possible scenarios that could...

First 126 Last

Share
Profile

Follow
El Jefe

6,066 Posts.

882

09/02/18

11:16

Post #: 30941140
Share

Originally posted by JB12 ↑

Have just sold my holding as I have serious doubts over Finstro's funding channels (initial shares purchased at 10.5 c and subsequently higher levels)

If Finstro is indeed lending the money to BIG, where is Finstro getting the capital from to fund this lending arrangement? I don't know how long they've been around but the reviews on their website only date back to September 2017...if they are a relatively new business, I highly doubt they have financing in place from the banks. Working in financial services, I've seen how hard it is to raise money for these SME loan products, so I also question whether Finstro or FCC have been able to raise much investor capital to fund these loans to BIG.

The AFR article raises the question as to whether BIG are issuing shares to FCC (and possibly related parties), who may be in turn, liquidating those shares at massive gains, in order to provide working capital to their business in order to stay operational...to me this reads like a ponzi scheme.

I have always wondered what the sales tactics in BIG's call centres may have been (having worked in a similar environment in the past), and now I'm even more concerned knowing that BIG has essentially been giving away subscriptions with very little/no initial outlay from the BIG customer (essentially free subs). Who knows what the sales guys are saying on the phones and how they are remunerated?! Perhaps it's in the order of if you cancel your subscription within 12 months, you won't have to pay for the first year? I imagine the sales guys are being paid comms on upfront sales, but it will be up to a separate renewal team 11 months down the track to try and keep the customer on board in order to obtain proper payment for BIG's services...similar to what mortgage brokers were doing with subprime NINJA loans in the US before the GFC. What happens when the customer doesn't pay their subscription costs or interest costs to FCC/Finstro? I am worried about anyone who has lent money or invested in FCC's products, and the ramifications this may have on BIG, as it hardly feels above the law.

The AFR article is useful in reminding us that Richard Evans has a previous history in taking a similar path for his prior company...

My two cents FWIW

Expand

Good summary mate.
One of the many possible scenarios that could play out here. Hopefully it’s not the case here.
Management is crucial at this end of the market.

Last edited by El Jefe: 09/02/18

BIG Price at posting: $1.99 Sentiment: None Disclosure: Not Held
Upvote

0 Great analysis

Reply

Top Stories

NEC

Nine Entertainment announces its CEO is stepping down – on an ex-divvy day

MTM

Forget gallium: MTM says it's extracted gold from e-waste

DXB

Dimerix begins recruiting young kidney disease patients in Mexico for Phase 3

3 stocks with antimony news on Thursday

ASX Market Open: Local bourse to trade green | Thursday September 12

CU6

Clarity progresses SECuRE trial with positive safety results

SS1

Sun Silver confirms high-grade extension theory at Maverick Springs with 79.6 g/t intercept

BRX

Belararox to grow copper footprint in Botswana with 4,286 square km tenure

CHN

Chalice jumps on Putin nickel export ban threat – but then there's bad news

GTR

GTI extends uranium mineralisation at Lo Hema through development drilling