Member Info for phoenixchi

The fundamentals of this outfit look sound and it does seem undervalued. Yet, the share price is falling all the time in recent months. Can anyone shed any light? As i have posted before, I do have some pretty good, albeit old, inside knowledge here that I still can't reveal but my stronger and stronger suspicion is that the company is getting it wrong internally somewhere along the line. Go back a few years and it was a shambles with total, blind reliance on procedure and process to do even the tiniest thing. I fear that culture still prevails, or has surfaced again, and thus is holding up any progress. In particular, I wonder - and it is only speculation on my part - if fear of failure through not adhering to process is killing sales? My past knowledge means I can remember when, about five or six years ago, they had a good chance of a very lucrative contract with a gambling company. But they started to behave prissily and the chance was lost. Today that gambling company is huge so fears about associating with it were unfounded and, quite frankly, snobbish. I do fear that as the board wrestle with weightier matters they are not able to see that process, procedure and fear is again taking root. Of course, I could be wrong but from the figures alone I cannot see why the share price has such a downward momentum. Any thoughts out there?

Dommo, Yes, my error on share spread. Was looking at another share as I wrote...

Great write-up, ElProfessor. I have inside knowledge of this company but can't, as yet, say how (for non-business reasons). Your key point which is spot on, though, is 'how good will they be at selling'. Well, sad to say, my view is that they will be poor. There used to be a huge culture within Xchanging of procedure and process - even by today's standards. It was a hangover from their early days where process and procedure formed the basis of their successful outsourcing. But process and procedure became a total obsession to the point where staff creativity was ignored. I fear the same thing still happens when they go to sell their products. Because they over-analyse and examine every possible lead before taking any chances and trying for a sale, they end up almost shutting out opportunities before giving them a fair crack. Hopefully, I will be wrong and I am about to buy back in but only, I am afraid, to try to make a quick- to medium 10% profit. Not one for the long-term for me.

I think, note only think, i can answer my own question here. Late last night i saw a report saying that the cost of decommissioning an old GB nuclear power plant is soaring and the schedule for the work is delayed. As Babcock are heavily involved in this, perhaps this news brought the price down - or at least led the MM's to slash it in hope of a sell-off and bounce back?

Anyone know why, after years of growth, this share is now having such a bad time. OK, Babcock lost a major contract recently but they are huge and that one contract loss isn't enough to justify this fall. I also note the spread is almost 14% On a share this size that must be very rare. Do the MM's know something we don't? Or, have I missed something? Thoughts?

cathcmeifyoucan - You 'assume' the contract is the same with OPAY as with Quindell. Why? As a business owner, I draw up different contracts for different customers all the time. You know the saying about the word 'assume' - 'u make an ass out of me'! Anyway, whatever the EFH deal was, it only involved less than 1% of the shares of the company. Even if your margin call 'dooms-daying is correct, it won't make much of a difference to the company's finances, will it? The share price has faltered because the market is in a bad spell and there are now too many people now ramping up the minor event with EFH so as to sell short. Unless the company is completely lying about its figures, OPAY remains, in my view, a very good bet and once the shorters receive their just desserts, we will see a good rise.

So, you think EFH now own his shares do you? Why, then, is he obliged to pay interest on the 4 million? What a deal he has made there then. He has 'sold' the shares at 2.66 when he could have got over 5.00 in the market and now has to pay interest on the proceeds he received from the sale. He must be one smart CEO. With deals like that, I am surprised OPAY has lasted more than a week. You state that if he does not satisfy margin call they can do what they like with his shares. You are therefore admitting that they are still his shares! Some sale that is. Terms of any loan generally state that the collateral can be disposed of anyway the people making the loan like if repayments etc. are not met. IT IS A LOAN with the shares as collateral. You also say small print 'may allow'. Do you know what the small print is or are you guessing to suit your opinion? It is funny how so many people who want to believe certain things choose just to ignore simple logic! And you tell me to wake up!!!

There seems to be a belief that he sold the shares, not used them as collateral for a loan. But IT WAS A LOAN - regardless of what the idiot press and others say! If it were a sale, why would he sell at 2.66 when market value was way above that? Well, the only reason I can think of for such stupidity would be if he was trying to get around a Directors 'close-down period'. If that was the case, OPAY would surely have ditched him now and he'd be in clink! If he wasn't in 'close-down' and he did sell so far below market price, well he shouldn't be running a market stall let alone a large company. I keep saying this - it is common for people to take loans out using shares as collateral but the current market seems to want to think it was a sale,as it suits those wanting to short the shares.

Let's be clear. If the CEO defaults on the 4 mill loan, then EFH can offset the value of the shares against the loan - IE sell them on the open market. I simply do not see what the fuss is about concerning a type of arrangement which is age-old.

Rhambo Read the company statement from the 14th November. If that reads like a sale then I give up!

That discount is perfectly acceptable. Whenever anyone takes out a loan they have to put up collateral. This is what happened here when the CEO put up his OWN Shares for the 4 mill loan. 1.5mil shares is less than 1% of the total in issue. Opay need to say no more and people need to stop making a fuss about nothing here - unless, of course, they are trying a spot of de-ramping so as to short....!

How are this crew getting away with it? they are now saying the the OPAY CEO sold his shares to Equity First! It was plainly a loan arrangement and Opay would do well to take legal action against Share Prophets before damage is done to a much larger degree. I tell you what, i back horses for a living and trade the stcok markets for fun. Horse racing is straighter than the markets will ever be!!!1

Unless I am an idiot, today's plunge demonstrates to me just how stupid the stock market can be. With £5k in Opay for three years I am well in front and am also well used to the knee-jerk Aim market ups and downs. But WTF is today about? People using share holdings as collateral for loans is age old - and that is what the CEO has done. He has used approx 1.5 million of his own shares in the company (under 1% of the total issue) to secure a loan. I can't remember what the share value was in the spring but let's say £5. Hence, the equity company accepted around 7.5 million in collateral against a 4 million loan - is that not standard stuff? They must be absolutely peeved tonight at their collateral having lost 20% and more in a day....but not as peeved as the CEO.... The only other reason I can possibly think of for a 20% drop - except for panic and sheep behaviour amongt some stock holders - is that credit card companies might get the wrong idea about a loan like this secured against shares. Given the OPAY model supplies payment facilities to credit companies and gambling sites etc, perhaps the CEO should have realised this but I hope he doesn't have to resign because that really will plunge the price. Unless OPAY have been lying openly about their figures, today's plunge must surely present a buying opportunity over the next few days. To end, at 54 years of age I am becoming more and more amazed at how people nowadays just cannot think for themselves and would rather listen to a 'man in the pub' than work something out on their own.

I work for them as well. I reckon there is up to a quick 10% over next few weeks going by previous drops. Will be dipping my toe! But hard to work out whether the market is wrong about XCH or the company is getting it wrong. Not convinced that the methods they used so successfully in growing this big are suited for where they are now though.