From the Racing Post.........
THE prospects of being able to buy shares in Betfair from as soon as next month appear to have taken a knock from the performance of other Stock Market listings in 2010.
In the absence of a commitment from Betfair on its long-mooted Stock Market flotation flotation
or froth flotation
Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water.
..... Click the link for more information. at a value of as much as pounds 1.5 billion, evidence from other firms appears to show the timing may be wrong.
A study reported by The Financial Times has shown that more than half of the big "initial public offerings" in Europe this year had shares trading below their issue price, leaving investors sitting on a loss.
It has led to claims that companies that have floated, such as Ocado, may have overvalued Overvalued
A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a their business and pitched the initial share price too high.
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"Investors are sick to the back teeth of being treated like idiots," one asset manager told the FT.
Betfair has steadfastly declined to comment on the timing of any flotation, but leading racehorse racehorse
refers usually to thoroughbred but may also include standardbred, trotter. owner and businessman Andy Stewart suggested yesterday they will be in no hurry.
At the same time, Stewart said institutional investors harboured one concern about a successful flotation - a possible increase in tax.
Preparing for such a massive sea change in the company's ownership is not without its difficulties, but thoughts that October was the favoured month for a Betfair float may need to be reassessed in the light of the post-float experience of other businesses.
Ocado, the online service that delivers Waitrose goods, was forced to cut its flotation price from 200p to 180p and, despite that manoeuvre, shares fell by 20 per cent in just over a month.
Of 31 businesses which floated across Europe since January and which raised more than $100m, 16 were trading under issue price last Friday. The FT also reported that the average performance of six launches backed by Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. - reported to be an adviser to Betfair - was a drop (from the issue price) of 0.7 per cent.
There have been signs Betfair is gearing up for a float. It recently launched what was dubbed dub 1
tr.v. dubbed, dub·bing, dubs
1. To tap lightly on the shoulder by way of conferring knighthood.
2. To honor with a new title or description.
3. its biggest marketing campaign to help position the brand as 'The World's Biggest Betting Community '.
Chief executive David Yu gave an interview to the Wall Street Journal last month in which he revealed a move beyond betting and into finance, with the launch of LMAX, a financial trading platform that will allow punters to trade on the movement of share prices without owning the stock.
For Stewart, founder of Cenkos, the broker and corporate finance adviser, Betfair fits the bill for a successful float in many ways.
"There has to be enough demand from public and institutional shareholders to make it subscribe, or it will get pulled," he said. "However, as far as Betfair is concerned, there are a number of areas where it is unique.
"For instance, it is the only realistic betting exchange A betting exchange is a peer-to-peer gambling website acting as a broker between parties for the placement of bets. The concept is similar to that of a stock exchange or a futures exchange, where in this case the commodity being traded is a bet, rather than a stock or futures and a monopolistic position to be exploited can be highly attractive to investors.
"The major concern for the institutions is whether the government will enforce legislation to make [Betfair] pay more tax. That is the big fear people have.
"A lot of people got badly burnt in the US when the government decided to clamp clamp (klamp) a surgical device for compressing a part or structure.
rubber dam clamp a metallic device used to retain the dam on a tooth.
clamp
n. down [on internet betting] and threatened to put directors in jail if they set foot in the US. Share prices fell by 90 per cent."
Stewart added: "Investors like Betfair, its record and its management team, and all that is highly attractive. That said, would you want to wake up one day and the government has legislated and taxed the model so substantially it is no longer attractive? "Betfair are not in a hurry. They don't need to float, there is no debt to repay and [Japanese shareholder] SoftBank is not a desperate seller.
"So they will wait until they get a sensible valuation. Both [Betfair] founders are investment bankers and will not be frightened by an article in the FT."
Betfair to play waiting game over flotation
'To trade on the movement of prices without owning the stock' - Isn't that spread betting?hgodden wrote:
Chief executive David Yu gave an interview to the Wall Street Journal last month in which he revealed a move beyond betting and into finance, with the launch of LMAX, a financial trading platform that will allow punters to trade on the movement of share prices without owning the stock.
And don't they already offer such a service - Tradefair?
Jeff
According to new reports they are now looking to press ahead
http://www.google.com/hostednews/ukpres ... ze9qZFsbvw
http://www.google.com/hostednews/ukpres ... ze9qZFsbvw
Ferru123 wrote:'To trade on the movement of prices without owning the stock' - Isn't that spread betting?hgodden wrote:
Chief executive David Yu gave an interview to the Wall Street Journal last month in which he revealed a move beyond betting and into finance, with the launch of LMAX, a financial trading platform that will allow punters to trade on the movement of share prices without owning the stock.
And don't they already offer such a service - Tradefair?
Jeff
I suppose its 'betting' and not 'spread betting' if it plans to be 'peer to peer' as there would be no spread? this sounds exciting to me if that is the case.. likened to what betfair done for us with sports but now for financials.. thats if im reading it correctly? anyone know how its gonna work? spread beeting companies must be woried if thats the case..
Some IPO's are done to raise money or expand and they are often quite good investments, but as Betfair don't need the money this float appears to be an exit plan for many of the shareholders, probably including quite a few staff. Therefore I think it will be very overpriced when it does come to market unless they can find some new growth areas. The existing model doesn't seem to be finding much growth and Betfair seem reluctant to partner people at a base level to reach recreational punters. Until they release an offer document it's difficult to know if its good value, but the current numbers that are being thrown around seem to suggest that's not the case.
Greg wood is talking about it in the guardian today
http://www.guardian.co.uk/sport/blog/20 ... ng-america
http://www.guardian.co.uk/sport/blog/20 ... ng-america
I don't know about you guys, but I won't be buying any Betfair shares:
A. Presumably the vast majority of punters in the UK and Australia who are going to use Betfair already do so.
B. I don't think their new financial markets venture will set the world alight - if it was a goer, someone would have done it years ago.
C. In the current economic climate, spending on gambling is likely to stagnate or decline for some time to come.
D. The levy, if introduced, could be a major spanner in the works.
E. Even if the US market is opened up, what's to say that someone like Donald Trump won't blow Betfair out of the water before they have a chance to get a foothold (let alone a stranglehold)?
Jeff
A. Presumably the vast majority of punters in the UK and Australia who are going to use Betfair already do so.
B. I don't think their new financial markets venture will set the world alight - if it was a goer, someone would have done it years ago.
C. In the current economic climate, spending on gambling is likely to stagnate or decline for some time to come.
D. The levy, if introduced, could be a major spanner in the works.
E. Even if the US market is opened up, what's to say that someone like Donald Trump won't blow Betfair out of the water before they have a chance to get a foothold (let alone a stranglehold)?
Jeff
Exacta wrote:Greg wood is talking about it in the guardian today
http://www.guardian.co.uk/sport/blog/20 ... ng-america
There's an article about it on the BBC website:
http://www.bbc.co.uk/news/business-11379349
Jeff
http://www.bbc.co.uk/news/business-11379349
Jeff
Bet Angel wrote:Betfair IPO will definately now go ahead: -
http://corporate.betfair.com/investors.aspx