dorset
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Post by dorset on Aug 9, 2019 13:41:29 GMT
Clearly as said before, the 2 July announcement was already fully priced in. With the cash burn proceeding at a steady (?) £30 m per half year then the share price is possibly back to flat lining in the 110p to 130p range?
IMO one of the big and critical unknowns is the rate of defaults on the 2019 loans but we will not get a feel for these until mid 2020 (punters in the 2019 loan book might get some early indications however).
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Post by GSV3MIaC on Aug 9, 2019 21:41:47 GMT
117.2 Things must be looking up!
Or it is the expired feline ricochet effect?
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djay
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Post by djay on Aug 10, 2019 11:35:43 GMT
Clearly as said before, the 2 July announcement was already fully priced in. With the cash burn proceeding at a steady (?) £30 m per half year then the share price is possibly back to flat lining in the 110p to 130p range? IMO one of the big and critical unknowns is the rate of defaults on the 2019 loans but we will not get a feel for these until mid 2020 (punters in the 2019 loan book might get some early indications however). The 2019 default rates will be important as they have set out their stall on it in a number of ways, especially to the markets. I think the markets may have a different take on the cash burn, the underlying loss narrowed significantly. Most of the burn was attributed to securitization and setting up new non retail funding lines. The market may have seen this positively- however if it caries on requiring this level of cash to generate loanbook funding in the future, it will be a different matter. One off costs are only one off if they are inconsistent. As I said earlier, we retail lenders are becoming progressively less important for the funding of the loan book.
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ashtondav
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Post by ashtondav on Aug 10, 2019 15:57:15 GMT
You can bet the farm on defaults being better in 2019, and returns nearer those promoted. The single proviso being if a hard brexit caused a deep recession. Something BoJo and co. assure us will be ticketyboo.
FC were seriously damaged in the city when the IT wound down because of the 2016-2018 cohorts making their (the IT’s) flotation commitments impossible to achieve (I think it was >7% in the prospectus).
The new institutional investors, who are pumping a shed load of money into FC will be on their case, which is good news for those investing in 2019 and bad news for those flogging 2016-2018 loans because the new investors don’t want them, and bad news for the old ceo, responsible for the pre FC flotation “pump ‘n dump”, who has been shuffled off to a non executive role.
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mikeb
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Post by mikeb on Aug 11, 2019 17:29:07 GMT
Also suspicious is th efact that according to the FC blog its last press release was end April. Before then there was at least 1 press release each month - which you would expect from a fast growing company.
It also appears that updates on defaulted/downgraded and late loans are drying up. Very rarely seeing anything substantive added, you know, action taken against lenders, charges taken over stuff. Recoveries department, what are you actually doing all day? Most updates are just a "A payment has been received and will be applied to lenders accounts", if that. I think FC have given up and gone home, and just not bothered telling anyone. The computers are running it all alone
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dorset
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Post by dorset on Aug 11, 2019 18:13:46 GMT
Not sure, Ashtondav, how new investors can say that they don’t want any of the 2016/2018 c**p but only the super quality 2019 c**p?
It may be taking investors 85+ days to off load but who then are these loans going to if not new investors or ones increasing their exposure?
Still fail to see how lots of quality SMEs are queuing up in 2019 to take FCs money. Any quality SME has no trouble accessing bank finance at a lower rate than available from FC.
One business of which I’m a director gets letters twice a year from our banker, (Natwest and latest last week) begging us to take out a loan.
I remain to be convinced and time will tell whether FC has struck a mother lode of quality SME borrowers who cannot for some reason get bank finance!!
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blender
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Post by blender on Aug 12, 2019 8:59:58 GMT
Not sure, Ashtondav, how new investors can say that they don’t want any of the 2016/2018 c**p but only the super quality 2019 c**p? It may be taking investors 85+ days to off load but who then are these loans going to if not new investors or ones increasing their exposure? Still fail to see how lots of quality SMEs are queuing up in 2019 to take FCs money. Any quality SME has no trouble accessing bank finance at a lower rate than available from FC. One business of which I’m a director gets letters twice a year from our banker, (Natwest and latest last week) begging us to take out a loan. I remain to be convinced and time will tell whether FC has struck a mother lode of quality SME borrowers who cannot for some reason get bank finance!!I do not know much about bank lending, but I always thought the main difference from FC was in the need for security. FC loans are unsecured apart from the personal guarantee which FC used to call 'quasi-security'. Perhaps these quality borrowers are attracted by, or dependent upon, an unsecured loan.
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Post by shanghaiscouse on Aug 13, 2019 10:00:06 GMT
I think you are exaggerating, and in particular your claim of a “run” is merely based on this board. However there is truth in what you say. However, I believe the company report on their 1st half in a few days and maybe that will provide some guidance. While they are bound to paint lipstick on the pig, auditors have toughened up since the last few scandals. "auditors have toughened up since the last few scandals". these words could have been spoken at any time during the last 40 years.
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Post by shanghaiscouse on Aug 13, 2019 10:08:10 GMT
I was thinking, what is the definition of a run on a bank? It is when depositors rush to withdraw funds so quickly that the bank cannot access sufficient funds to repay them, either from cash on hand, borrowing, liquidating loans, raising capital, etc.
So is there now a run on FC? Well, we are not depositors, so in a conventional sense there is no run and they could simply stop writing new loans for a while to allow the ecosystem to balance. But they don't want to do that as this would impact on their commission income. So they are caught on the hamster wheel, they have to keep writing more and more loans to grow their revenue. So basically there is a conflict between lenders and shareholders. We as lenders want our money back now. But that would cause revenue to drop, so to protect shareholders they just elongate repayment times.
Is it a run? Is it a ponzi scheme? I'm still considering... maybe its more like the latter as it relies on more and more new fools joining to cover the old ones leaving, and it is allowing the old ones to leave that maintains the pretence of legitimacy, just like a ponzi scheme.
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Post by shanghaiscouse on Aug 13, 2019 10:11:03 GMT
Not sure, Ashtondav, how new investors can say that they don’t want any of the 2016/2018 c**p but only the super quality 2019 c**p? It may be taking investors 85+ days to off load but who then are these loans going to if not new investors or ones increasing their exposure? Still fail to see how lots of quality SMEs are queuing up in 2019 to take FCs money. Any quality SME has no trouble accessing bank finance at a lower rate than available from FC. One business of which I’m a director gets letters twice a year from our banker, (Natwest and latest last week) begging us to take out a loan. I remain to be convinced and time will tell whether FC has struck a mother lode of quality SME borrowers who cannot for some reason get bank finance!! FC themselves state that in Q1 they lent more to SMEs than the UK banking sector combined. That really tells you all you need to know about their standards. They are leading a race to the bottom, and leading by some considerable distance. Is it really credible that a start-up run by kids is sufficiently in control of itself to lend more than every other bank in the UK combined?
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ashtondav
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Post by ashtondav on Aug 13, 2019 10:12:25 GMT
Well, anyway in a flat market the shares have risen about 20% in the last few days so someone must have been reassured (or relieved) by the 1st half announcement.
Holders of the damaged 2016-2018 cohorts who are trying to dump them will be anything other than relieved of course.
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daveb
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Post by daveb on Aug 18, 2019 20:34:10 GMT
The share price has been very flat since they plummeted in late June. Glad I never bought any
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ashtondav
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Post by ashtondav on Aug 19, 2019 7:37:12 GMT
Yes better returns from being a lender. A good demonstration of how p2p stands in comparison to equity.
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Post by bracknellboy on Aug 19, 2019 8:21:52 GMT
Yes better returns from being a lender. A good demonstration of how p2p stands in comparison to equity. Uhhhh ? I do hope that was tongue firmly in cheek. And if not, do you base many of your life decisions based on single data points ?
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Post by Deleted on Sept 6, 2019 7:36:54 GMT
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