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Positives are that covid 19 vaccine is here... So that will give certainty in being able to restart lending without payment holidays being an issue. Also means more people with jobs to service new loans. It means more people going on special holidays which was a main driver of loans business. Basically sp has been slow to react to this news compared to others shares.
Company can also learn from the procedures of the past which have lead to complaints and be better because of that.
Negative points are brand damage as media using words like controversial... Anger... And miselling which I don't think is entirely fair as amigo gives credit to those that want to rebuild credit record and to those who can't get lending else where. No one knows exactly how many will have grounds for complaint. Basically it's not everyone but anyone who had trouble repaying it seems and there are alot of claims management companies sniffing around. the more complaints they get the more experienced they get with dealing with them. We don't really know how many loans went smoothly to repayment and how many did not so have no idea how many complaints will come in before the company can resume business as normal.
My thoughts are that in the event of complaints depleting it's reserves completely it would likely go bust with only bond holder receiving part of capital back. And shareholders would receive nothing. But if amigo gets through it and has enough to pay out all compo I can see it being worth hundred of millions of pounds again. So it's a bet basically.
I think they will scrape through and become valuable again. But I could easily be wrong. As An investor here you must be prepared to lose everything if it goes wrong in the hope of mega gains.
I have lost thousands and thousands on paper.
But see some glimmers of hope. The deadline was reached pretty much So put them in better position with FCA.
I have confidence in the management. They have done the right thing by reporting the claims management companies to fca and will come out fighting. Also there is still capital to come back from loans made in the past Albeit at a lower amount... Further cash will be generated.
I am super happy with the staff. They have worked really hard.
We also know the position in terms of numbers of complaints which removes the uncertainty.
The answer is most people who had any difficulty repaying will now make a claim owing to the fact that claims companies are becoming predatory. It is an absolute snowball affect and I don't think it's fair. Many lied to get credit and now the blame is falling on amigo becuase they took their word for it.
The FCA has recognised that things are getting out of control and taken a precautionary measure to restrict cash. In other words they see a risk of amigo falling out of existence if the snowball continues to roll on.
I'm not selling simply because I think most people taking out loans would have been decent and met payments in full without problems and therefore with no right to complain
Amigo have put aside 115 million to pay for misold loans. Claims companies have seen that there is a 94% uphold rate by fos and an average 4500 a claim being paid to people who claimed miselling and thought... That is big enough to make money from a cut.
They know that 220000 different individuals took out loans since 2005 at 3 quarters of a billion quid and that is alot of people they can get fees out of. They have put adverts advertising basically saying ... An opportunity has arisen to complain and get loads of money. They are happy to write the letter in exactly the way to get compensation.
Here is the thing. People are getting paid out when they lied on their application becuase amigo 'should have. Picked this up'
Claims companies are putting ideas into people's minds that people underestimated expenditure due to guesswork. Maybe true sometimes but more often then not probably lies which they say afterwards was accidental.
I am very concerned that Amigo is getting attacked sometimes fraudulently by claims and I hope the regulator see this side of things. As a shareholder I want those genuinely misold to be redressed but I do not want these opportunists unjustifiably running this business into the ground.
If amigo survive all this. They will come back much stronger I'm sure with a much better process of lending.
I know I said I would not look at this again until Xmas but I have and I really can't see why on earth is this down down down? They are going to start lending again and have basically said they have enough cash because bod has been keeping it back. Markets are up since 21 Sept. Takeover can't be ruled out. Puzzling. Is it because of confidence because bod is not producing numbers or measures or releasing good news?
If 70% of shareholders did not participate in voting. That says to me They do not care who manages the company and in it on the wider long term play. If you strongly supported JB and did not vote and you are sad. You only have your self to blame though
So the current management actions appear to have reduced risk of worse case scenario which was insolvancy. Now they have the vote Management can now focus on company issues and complaints instead of worrying about their job and the company at large being disrupted by change.
Pressure was taken off business. Cash balance is adequate. Jb whilst not buying back in can't sell anymore shares and possibly supporters of the board will top up and mop up
The risks I can see are the loan defaults and complaints compensation. But there is cash there and board seem more confident now give they will even consider lending more. They have released a statement of willingness to resolve issues.
I have topped up sub 10 today to Bring down Average. I am now way more exposed to amigo then I should be but hopefully right decision.
I think I would have preferred JB but I don't think it was critical to have him in charge like some do and it would have been a faff.
There is a small probability of JB launching a hostile take bid for Amigo if the sp was low enough which will also lend support to sp in short term.
Position continues to improve as far as I can see.
I could be wrong but I reckon this will be worth much more in the future. GL
I bought at 17.5 and feel pretty bad today. Will just have to hope for the longer term.
I do think it has potential which I think is why i'm not selling, but it needs some luck. GLA. I am not watching this anymore.
Will be back at Christmas to see if I have any money left here. Hopefully the drug companies will sort the vaccine as soon as possible so governments can stop trashing the economy.
Wow I thought with JB all sold out the SP would fly past 20. Instead it's gone down... Ouch? I am holding very large losses on paper.
I'm not selling though becuase as far as I can see... Nothing has been released since the results Q1 which paints a poor picture. Which means it can only be pis fearing a poor outcome from the vote (the opposite of where they side) and traders chasing short term rainbows elsewhere until news appears to be on immediate horizon and maybe fear if we are really on target to get through all complaints. ha. It doesn't matter... A chief executive is not as influencial as you think in a big company. It is more about luck and company collective wisdom and skill. Read fooled by randomness which explains this in detail.
This company just needs to get on with things.
Basically he values himself so greatly he thinks the company can only be profitable with him in it.
This is a desperate attempt to take control. Not about money it's about pride and how he started out.
It seems irrational selling for lower than long term worth but it totally makes sense to me. I don't think he has ramped up the share price. He just values himself