Bullshit they signed up 5.4% of their staff in one day (this AFR...

Bullshit they signed up 5.4% of their staff in one day (this AFR article was published on Thursday afternoon).
Cashrewards is averaging around 60,000 new users per quarter = daily average of 666....
Probably explains the boom before the announcement with employees spreading private information or trading based off it.

See potential in their business but keep seeing signs of low quality.

• presentation errors
• Dud of a CEO
• Odd financial metrics/statements e.g. $1.3m in R&D YTD?
• huge disparity between total & active users, seems like a large portion of active users is just new users indicating low customer retention.
• heavy use of underlying metrics to detract from poor topline growth during period of boom in eCommerce, low customer growth relative to the amount of straight cash handouts from their deals
• high cash burn with declining margins
• churn in merchants (Ozbargain is a good historical record of merchants and graveyard of competitors)
• Competition and low barriers to entry, kickback.com.au (new competitor just entered with virtually the exact same merchant network in April 2021), Commbank rewards
• Number of similar business which eventually failed e.g. Jamjar, Pricepal (founded by Catapult chairman), Qwibble , indicates business model in this segment is fundamentally flawed
• Business is relatively mature, existed for 8 years with over a mil in users which is a decent chunk of the population, therefore unlikely to solve these issues with scale

Positives from ANZ deal

• Increased focus on data with targeted deals, increased utility from collection of purchase data
• Leveraging consumers trust with ANZ
• Focus on 'savers' with directing the cash savings/rewards
• More seamless customer experience e.g. autopayment, integration with ANZ app/site to view or redirect savings, creates a genuine competitive advantage over competitors.
• Even if they achieve half the stated goal of 500,000 customers (5% of ANZ cardholders) using the new offering by 2023 that will double Cashreward's active user base (around 250,000 presently) which should also double revenue = $50m (incl. recovery of travel segment)
• That pegs the forward 2023 EV/Sales ratio at about 1, if the goal of 500,000 is achieved it would be about 0.7 (calculations conservatively doesn't include growth outside of ANZ partnership)
• Factoring in low sales multiple for low margins, near term cash burn and discounting not a crazy amount of upside but has the potential to run up from speculators. Going to hold my small holding purchased at 70 cents