Betfair set float price

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andyfuller
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Closed the week at 682.00p. A fall on the day of 39.50p or 5.47%

Next stop 600p?
Mike_IG
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Joined: Thu Apr 16, 2009 9:25 am

So are we all pooling our money together when the price hits £1 and buy enough to trigger a buyout??
andyfuller
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Betfair shares hit record low as analysts fret over lack of underlying growth

Steven Stradbrooke

July 9, 2011

Betfair shares hit a new all-time low Friday, dropping 39.5p (5.5%) to 682p — just 32p over half its £13 IPO price last October. The ‘down’ button was pressed by analysts at UBS, which announced it was cutting its target price from 775p to 660p on concerns over the lack of underlying growth contained in Betfair’s recent full-year results.

Further downward pressure was applied by BancoEspirto Santo de Investimento’s new target of 630p. Analyst Alistair Macdonald also cited lack of growth as the source of Betfair’s problems, and warned that the company’s plan to remedy the situation could backfire. “Betfair’s updated growth strategy is effectively turning into a conventional bookmaker over time, diluting the original exchange proposition. In addition, we are concerned by the possible exchange liquidity impact of increasing commission charges for highest value customers.”

This commission increase is scheduled to kick in July 18. As many as 500 whales whose lifetime profits top £250k and bet in over 1,000 markets will face charges of up to 60% of gross win. Betfair claims to essentially break even on their whale wagers, but that handling their technical demands takes profits away from other sectors. “Betfair believes that the implementation of the adjusted charge will provide the business with fair compensation for the service it provides to those impacted customers, who currently pay a rate of commissions and charges that does not reflect the benefit they gain from the Betfair ecosystem.”

But as Alistair the analyst noted, the Betfair ecosystem is slowly morphing into a conventional bookmaker via the expansion of its fixed-odds offering (‘risk-based products’ in ecosystem-speak). That could pose problematic, not to mention a tad hypocritical, as Betfair has previously argued that its exchange model set it apart from trad bookmakers, and thus it should be taxed more favorably.

The emphasis on fixed-odds wagers reinforces the growing meme surrounding Betfair that they’re last year’s model; bereft of new ideas, like if Apple had followed up the iPod with a portable 8-track tape player. (Look it up, kids.) The meme is perhaps a tad harsh. Undoubtedly, Betfair has a lot of very bright people on its payroll, many of whom would be eminently capable of righting the ship if their hands weren’t so tightly bound.

In 2009, CEO David Yu was asked about a potential IPO, prompting him to caution that “there are pros and cons of being public.” Among other things, Betfair claimed that going public would give the company “the flexibility to react to a developing and consolidating online betting and gaming industry.” Betfair clearly envisioned going on a shopping spree of symbiotic companies, paying with shares instead of cash. But with the stock trading at half its IPO value, the early investors holding the £13 shares won’t stand for a further dilution of their holdings. So new opportunities for growth can’t simply be bought over the counter.

Nor can they be achieved via an expansion into Asia, the planet’s biggest betting market. Among the IPO cons of which Yu warned, the shareholder agreements that preclude Betfair from establishing a presence in Asia loom largest. And with no Asian strategy in the works, the company will likely never achieve the new growth it so desperately craves. David Yu has already deployed his ejection seat, meaning Betfair will have a new CEO by October. Unless he/she arrives holding a secret blueprint for a new iPod, or the money to take the company private again, his/her tenure will likely be a bumpy one.


Source: http://calvinayre.com/2011/07/09/busine ... ecord-low/
andyfuller
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Betfair poaches bwin.party exec

11/07/2011

James Bennett


Betfair has poached bwin.party’s central marketing director Matt Robinson to become the exchange’s emerging markets director, a new role created for the experienced gaming executive.

Robinson, who has been at PartyGaming, now bwin.party, for two years and was previously at 888 for six years launching the brand in the UK, will join the exchange in September reporting to chief commercial officer Niall Wass, and follows the recent appointments of other gaming veterans including ex William Hill exec Ian Chuter, group operations director, also a newly created role, and Michael Bischoff, the exchange’s latest director of information services.

In a statement seen by eGaming Review due to be released later this morning, Betfair said Robinson’s role would focus on “providing direction across product management, marketing, brand management, sales and distribution in new territories.”

Commenting on the appointment Wass said: “The creation of this role is further testimony to Betfair’s international aspirations. Matt will play a vital role within the commercial function as we aim to position Betfair for entry into new countries and territories around the world.”

Betfair’s share price fell below 700p for the first time last Friday and has fallen by more than 50% since it floated on the London stock exchange last November. A number of unfavourable regulatory decisions in key European gaming markets including Greece and Germany, poor product performance including Betfair’s financial trading site LMAX and the departure of several senior executives including LMAX’s CEO, have seen the decade-old company’s stock suffer and forced its own chief executive, David Yu, to announce he is stepping down as soon as a replacement is found. Stephen Morana, Betfair CFO, ruled himself out of replacing Yu at the end of last month.

At the time of Chuter’s appointment analyst Ivor Jones of Numis issued a note saying his firm “[expects] a better-structured Betfair to result from his influence.”Jones added that “After headlines about senior-level departures from Betfair it is encouraging to see an excellent new hire.”

Robinson’s appointment will give the struggling firm a further lift with bwin.party said to be sorry to see the well respected marketing expert go.

“We are confident of making sure we maintain good continuity as regards to the [Matt’s] role. We always have a succession plan,” a spokesman for bwin.party told eGaming Review.

“We’re sorry to see Matt go, he’s very talented as well as a great person and we wish him well,” he added.

Following Yu’s departure it is thought Betfair will re-focus its strategy on its core exchange, fixed odds sports products, mobile as well as attempt to re-invigorate its marketing and online customer brand engagement. In mid June this year it appointed rival Paddy Power’s former advertising agency Big Al’s Creative Emporium (BACE) to work on new marketing campaigns, beginning its partnership with the creative agency with immediate effect.

Several senior sources within the industry have told eGaming Review Betfair is slowly moving away from being viewed as a technology business to being viewed as a gaming business.

The outgoing CEO told eGaming Review last month he was upbeat about the company’s future growth plans including integrating more fixed odds sports betting products into the exchange to provide its “very loyal” customers with a single source on which to bet on sports, rather than leaving the site and betting elsewhere.

“We think we have 72% of our customers’ current sports betting wallet. There is an opportunity to add in sports book-type markets around this. We know they are spending money elsewhere. Some customers have multiple accounts, and we want them to spend more with us. We’ve added other products over the years such as multiples and Tote betting, what we’re now going to do is add in fixed odds products around our core exchange and going to be integrating this together with the exchange.”

Yu said this would be done by the “back end of this year” suggesting Betfair would build most of this itself but adding that it had also lined up a number of unnamed third parties to help achieve this target date.

“So, overall we’ve fixed the internal issues and we’ve got a plan for growing the business, improving our margins and continuing to deliver to shareholders.”


Source: http://www.egrmagazine.com/news/1678132 ... exec.thtml
andyfuller
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FTSE: market report as it happened, July 8, 2011

......"Meanwhile, Betfair drifted 39½ to 682p as UBS cut its price target 660p from 775p. BancoEspirito Santo de Investimento also published a bearish note on the stock and reduced its target price to 630p. Alistair Macdonald, an analyst at the broker, said: “Betfair’s updated growth strategy is effectively turning into a conventional bookmaker over time, diluting the original exchange proposition. In addition, we are concerned by the possible exchange liquidity impact of increasing commission charges for highest value customers.”

Source: http://www.telegraph.co.uk/finance/mark ... eport.html
andyfuller
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Share price taking another hammering today.

As of 11am:
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hgodden
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There must be a rebound at some point. I'm not going to sit here working out PE ratios etc but I wouldn't be surprised at all if it's become value now
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superfrank
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hgodden wrote:There must be a rebound at some point. I'm not going to sit here working out PE ratios etc but I wouldn't be surprised at all if it's become value now
don't try to catch a falling knife...
andyfuller
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It has been a good few hours for Betfair, back up to 718.50 at 11.45am up 6.13% on the day.
Iron
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Bizarre! Does anyone know of any news that's come out of Betfair today?

It could just be a dead cat bounce! :lol:

Jeff
andyfuller wrote:It has been a good few hours for Betfair, back up to 718.50 at 11.45am up 6.13% on the day.
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Euler
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Surely shorters closing positions.
Iron
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It could also have been due to this press release, issued yesterday: http://www.reuters.com/article/2011/07/ ... NS20110712

Jeff
andyfuller
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You could have given Paul Lamford some credit for doing the leg work ;)
Reuters wrote:Betfair Group plc (the "Company") announces that in accordance with the authority granted by shareholders at the Company's Annual General Meeting on 6th October 2010 it purchased 100,000 of its Ordinary shares of 0.1 pence each ("shares") on 12 July 2011 for cancellation.
What does for cancellation mean? They don't plan on selling them back to the market?
Iron
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andyfuller wrote:You could have given Paul Lamford some credit for doing the leg work ;)
Paul who? ;)

OK, fair point.

Paul - If you're reading this, credit where's it's due, you found the news story (although I did dig out the URL!). :)

Jeff
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Euler
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Basically if you issue shares people can buy them to own part of the company. If the company buys shares then cancels them, then there are less shares in circulation and the remainder shareholders owe a little bit more of the company.

It's a bizarre thing to do when you have only just floated.
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