I completely agree that this is a unique finance proposition,...

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ValueTrader82

656 Posts.

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30/08/17

11:24

Post #: 26860806
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Originally posted by mal85 ↑

@ValueTrader82
I encourage you to look at the financials more closely and see for yourself what you think (and try to specifically ignore your industry biases to see if there is a chance that you have it wrong- it could be profitable for you given the time you have already invested looking at this).

You can work out just about everything you need to make an informed judgment about valuation with the currently published data (I agree that you couldn't before), including the equity/debt split, the headroom on the facilities, the bad debt risk etc.

I agree with you in principle that the big money is often made before some of these vehicles list and that most IPOs in this sort of space are massively overvalued. BUT there are exceptions (e.g. Facebook) and this may very well prove to be one of them (the jury is still well and truly out and it will take a couple of years to know). Fundamentally, to achieve a superior return in the market, the market has to misprice companies. In today's day and age the mispricing is not done on the finely tuned quants- but rather on the assumptions that underlie the valuations- and I would encourage you to question yours.

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I completely agree that this is a unique finance proposition, and is extremely efficient in its use of funds.

I just think markets value growth, and potential return on assets is impressive BUT ... I think the markets obsession with rewarding growth is fine for your typical SAAS/tech play... its just not fine in scaling a finance companies an extreme pace, particularly in potentially onerous segments of the market, where we already know this country is exposed to extreme levels of debt per capita, card arrears, car lease arrears, mortgage arrears and extreme asset overvaluation.

Comparing this business to facebook is futile...

What basis do you value this business on? Can you share your own thoughts and comps?

@AllFuelledUp @dubspec ... not sure if you want to comment here... I am a bit busy on 2 deals this week, so dont have the time to really open up at length

Last edited by ValueTrader82: 30/08/17

APT Price at posting: $3.62 Sentiment: None Disclosure: Not Held
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0 Great analysis

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