Member Info for GSmiley

With one day to go to the FCA's deadline to report on the purchase of SKRILL I find it (apart from the fact that this is AIM) surprising that people are selling. Health warning: I always get this sort of stuff wrong... but: The FCA is a responsible institution and the last thing it wants to do is to precipitate unwarranted movements in the sp. This deal has been known about for some time now and OPAY has a compliance record with the FCA such that if it was unhappy, the FCA would have said so long before now. Probably in the form of an announcement that suggested it simply needed more time to consider etc etc. As that announcement has not been made to date, it would be strange if it happened on the penultimate day allowed for consideration since it gives OPAY virtually no time to reply. Therefore my reading is that we will get an OK from the FCA and that the sp will rise as a result. So I think what is happening now is profit taking, probably by traders. For me there is a spread bet looming if the sp goes much lower. GL GS

As soon as I post this, Techni will arrive and show how it is really done. My guess, based on an extremely elementary chart is that now 250-260 is broken we should be looking at higher areas. I suspect the next one will be in the range 300-310 rather than 290. That is only 10-15% from where we are. For me the big call is what to do assuming the FCA say yes. One the one hand there is the Sell on news, wait for it to drift back and buy in again strategy. We all know that about 9 times out of 10 on AIM that works. Too well discussed over too many bb's to add anything to the debate. The other view is that there is a very fair chance that a number of investors especially ii's will be waiting for the news and will buy if it is favourable. Because: 1. An FCA approval means that main market and then FTSE250 membership are just about inevitable. 2. On a proforma basis the merged entity will be trading (at today's sp) on an historic p/e of 10. Bring in the expected synergies and I think that falls to about 8. 3. That valuation does not reflect the quality of OPAY's management, the growth that is seems capable of continuing or the prime nature of its business model.. 4. Like it or not, there are several potential predators out there, who would like to have some of what PayPal has got and who could buy the enlarged OPAY out of petty cash. 5. Comparisons are dangerous and PayPal is the giant in this business. But OPAY has consistently grown revenues and profit faster than PayPal and shows no signs of slowing down. I do not think it should be on the sam dizzy rating as PayPal, but right now the market is giving it no credit whatsoever for doing as well as it is. So there may be a strong argument for a price bounce that is SUSTAINED if the FCA comes back with a yes. I freely admit I have not got a clue what to do. Please feel free to comment - although I do not promise to take any advice offered....:-) GL GS

Wolf- At about 240, Techni posted the following: Areas I'll be watching on the way up are: 250-260 290 344 Above that and we are in clear water. Current levels up there would be: 379, 423, 561, 758. There will be shorter term levels as price unfolds but I can post those if the need arises. GS

See post titled Thursday further down this page GS

It is the 30th July. Which is when the FCA is due to pronounce on the Skrill takeover. It is all in the RNS's GS

Could not agree more. That's where my shares are. I think the sp has been held back by a combination of the Budget and China. What people forget is that this is a modern, slim banking operation which is very much faster on its feet than its larger competitors. Which is why profitability and originations were both up so strongly and look set to continue. It is also being followed by SCSW which always helps.... GL GS

I think I probably side with jolly in terms of market view. However mine is tempered with the thought that if you can find real value, then even if their sp falls - which will not necessarily be the case - the company (ies) in which you are invested will hopefully do two things: 1. Be able to take advantage of any asset price slump, 2. See their sp recover faster and earlier than less valuable businesses. So my targets are either rich in management (EMR is a good example) or have grossly undervalued assets or are seriously undervalued when you strip their cash out. These all provide insurance of one sort or another. Having said which, I am usually very heavily invested and right now I am about 30% in cash and will probably let that rise to 50% if a couple of likely lads come in and I can top slice. But I am very happy here. GLA GS

Very interesting to see if any large orders were being filled today. With a frenetic last ten minutes like that it would be surprising if there were not. GS

Likewise. BB's are usually pretty useful guides. GS

Mmmm. You are right, there has been no addition to the sum total of our knowledge today. Nevertheless the next 25 minutes will be very interesting. I think 275 would be amazing at the close, but it would leave a higher range of 310-320 open for FCA approval next week. GS

Everyone makes mistakes. However the facts contained in Liberum's note are accurate. Even with AIM's mm's up to their usual tricks it is hard to see the sp falling by more than (say) 10% from here in the short term. Worst case. With a yield of 5% and future revenue and profit growth pretty much assured, any short term fall will be overtaken by events. Low p/e, high cash, progressive dividend policy, growing market and growing market share. This has to be a banker share. GS

I have just talked to a friend who understands these things. The Schedule 1 RNS is a preparatory release to officially lay the way for the issue and immediate ability to trade the new shares that will be issued as part of the purchase of SKRILL. It is standard practice in these circumstances. His OPINION was that the key sentence in the whole thing is "The Company expects completion of the Skrill Acquisition to occur in early August 2015." OPAY could not say that if the FCA had indicated there might be a problem/delay and with 4 working days to go to their legal deadline (which is 30th July, not 31st) the FCA would have identified areas of concern before now. So his comment was "looks like OPAY is confident this will happen because the BoD would look stupid if it did not". Early August for completion because it will take a few days to make the takeover reality from the date the FCA gives it the all clear. Excellent news, predictable spike but a bigger one to come somewhere between here and next Thursday I think. GLA GS

BB - I suspect you will be proved correct ref. timing and I am sure your point about US approval is valid. My thrust however was much more that this looks just about certain to increase by 15-25% over the next week and I am not sure that apart from typical over-reaction (which would then be corrected) there is much downside at this sp if the FCA unexpectedly say no. Bit like a 5:1 on bet on a horse in a single horse race, on the flat, where there is no requirement for the horse to actually do anything but walk round the course... those are the sort of odds I will take all day long. GL GS

My understanding is that the FCA is required to either grant or withhold approval for the purchase of SKRILL no later than 30th July, which is a week today. The only exception would be "unless the FCA exercises its statutory right to interrupt the consideration period" (RNS 3rd July). I would have thought that if there was an issue, the FCA would have done that before now, so I think we are just counting the days until its report saying OK comes out. At which point the sp will not be 254-255p. Am I missing something? GS

I think it is going like a train and I do not believe the fluctuations are big enough for an amateur like me to trade my stake up, but the sp has already retraced, and I suspect it will drift down a bit further yet. I am quite happy to it and wait for the word to get out - this has to be one of the most undervalued stocks on AIM and barring an unannounced increase in overhead early in its quoted life, I do not think XLM has put a foot wrong since. It carries an israeli/gambling discount. One is unfair and the other is unwarranted given the market. GL GS

Sorry - what I missed out was that ITP was bought on a p/e of about 3.5. On that basis it cannot fail to be earnings enhancing assuming it is successfully integrated. (Which given today's RNS may not be a foregone conclusion, I grant you). From a capital perspective, the ROCE is about 12% (and has been on average over the last 3 years). Assuming the RNS numbers are correct. then this deal looks as if it is better than 25%. Which following your logic is a good thing I think. Horrid fall today, but hopefully overdone. I will probably look stupid, but added some more - average is still below sp. GL GS

@Chomsky On todays volumes a rise of over 20% has to be more than pure speculation that CSI is looking at possible investments. It smells to me either as if someone is buying in big time or news is leaking about a deal. What do you think? GS

Big reduction in their holding. Cannot believe they do not like what they hear, but I suspect that they have taken a bit of profit and may buy back later if the sp falls. I did because that is the way this share behaves. GL GS

I guess the answer to the question is that it depends on when you bought in. I am afraid I saw this relatively late - only saw the AGM statement. However there were opportunities to buy in after that at around 31p which meant I was effectively buying cash. Add in the key players (Dobbie, Kestrel and Griffiths) and their track records and connections and it is hard to believe that this is not more likely to go up than down. What is needed to make that increase more substantial and more permanent is newsflow. However these are not people to be hurried and (what is unusual for AIM) - they are not in it for fat salaries, so the cash will stay intact while we wait. No idea of timing though but the sp move suggests something may be afoot. GL GS

Interesting that Safecharge, which is in exactly the same space but only one third the m. cap of OPAY is on nearly double the p/e. They came out with a positive but vague update today so are up a little bit. Downside is that their founder/largest shareholder has a criminal record (for fraud from memory) so governance might be an issue! I think that OPAY is just being held back while we wait for FCA news. BWTFDIK GL GS