well spotted. but if that is the reason, then sellers are pretty...

well spotted. but if that is the reason, then sellers are pretty short sighted. it was not long ago that funders didn't need an AFSL and this company was killing it. first mover advantage, existing relationships with law firms are both huge. in the big dollar cases (class actions) the law firm picks the funder and the clients climb on board so there is less need to compete on price of funding. Australian cases also making up an increasingly small proportion of total case mix. I'm buying more on the dip.

@travm

I don’t know what the reason for the drop is, and am not suggesting that the piece of news above (if at all related) justifies it. As I have articulated before (see for instance my previous post below), I believe that smaller litigation funders operate at an inherent disadvantage, irrespective of their relationships with law firms.

https://hotcopper.com.au/posts/52315287/single

Another thing I have noticed is that, over the past two months, there has been a steady build-up in OBL shorts (see link below):

https://www.shortman.com.au/stock?q=obl

Again, whether this is related to the expectation of negative developments relative to Wivenhoe/Westgem, or to a more long-term view of deteriorating ROIC across the industry, I have no idea.

Regardless, I personally believe that OBL at its current price does offer an attractive margin of safety in terms of expected IRR over a 5-year period (see link below):

https://hotcopper.com.au/posts/52305192/single

So, while I am already maxed out on OBL relative to my current risk appetite (~3%*NAV), this is certainly something I would presently contemplate buying into if I didn’t have the position on.

Cheers