m2btj
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Post by m2btj on Sept 6, 2019 8:00:34 GMT
Whoever set the opening IPO share price at 440p grossly misrepresented the business in my opinion. The sort of crass stupidity we saw during the dot.com madness where investors lost their money within 12 months.
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Stonk
Stonking
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Post by Stonk on Sept 6, 2019 9:54:46 GMT
Whoever set the opening IPO share price at 440p grossly misrepresented the business in my opinion. The sort of crass stupidity we saw during the dot.com madness where investors lost their money within 12 months.
They probably did misrepresent the business, thus inflating the IPO price. It was not very long at all before various pre-IPO claims were withdrawn or reversed.
But who was stupid? I thought investors saw it for what it was: a poll on this forum asking whether you would buy shares in the IPO had 39 negative responses versus 3 positive. Were there many amateur investors who bought in with little consideration simply because of an over-excited email from FC asking them to participate in their glorious new era? Or have institutions lost out big-time?
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m2btj
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Post by m2btj on Sept 6, 2019 14:24:34 GMT
Whoever set the opening IPO share price at 440p grossly misrepresented the business in my opinion. The sort of crass stupidity we saw during the dot.com madness where investors lost their money within 12 months.
They probably did misrepresent the business, thus inflating the IPO price. It was not very long at all before various pre-IPO claims were withdrawn or reversed.
But who was stupid? I thought investors saw it for what it was: a poll on this forum asking whether you would buy shares in the IPO had 39 negative responses versus 3 positive. Were there many amateur investors who bought in with little consideration simply because of an over-excited email from FC asking them to participate in their glorious new era? Or have institutions lost out big-time?
I certainly steered clear of the share offer! I wonder how many institutional investors were caught up in FC's spin & PR. I'm invested in FC P2P but I've been running down my holding since the introduction of auto invest a couple of years or so ago.
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tjtl
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Post by tjtl on Sept 7, 2019 7:14:57 GMT
With the share price down to 105 pence, and the market capitalisation down to £387m (down from over £1.5 bn at the time of the IPO) the company is poised to fall out of the mid-cap index which will lead to more selling pressure- particularly from index funds. The stock was sold by Bank of America, Goldman Sachs, Morgan Stanley and Numis overwhelmingly to institutional buyers- but remember those institutions manage savings and pension funds- so it is the poor man in the street who has seen their wealth fall. The sellers of the old shares, who took out over £120m, must be feeling as smug as those that invested feel stupid. The company is fundamentally uninvestable- the business model has been shown to fail in the first gentle breeze of recessionary winds- given the storms that may be coming it looks to be as secure as a tent in a storm. The next proper update to the stock market could make sobering reading for shareholders, and be great material for investigative journalists - I hope I am wrong (as I was an early supporter of the whole sector) but FC have put more feet wrong than Boris Johnson in the past months- and that is saying something.
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Post by shanghaiscouse on Sept 7, 2019 14:05:18 GMT
A few comments, (i) this is not a P2P company any more so people should stop thinking of it that way, how can it be P2P if you don't choose the loans and they intermediate for you, and (ii) the business model is not buckling due to any recession, the problem is reckless expansion. their goal was to lend more than the entire UK banking sector. that is frankly insane. investors and lenders have paid the price, whereas the owners and management took their money and ran (there was no lockup period on the IPO and all the company insiders sold immediately).
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cwah
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Post by cwah on Sept 8, 2019 22:52:01 GMT
Who was smart enough to short the stock?
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m2btj
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Post by m2btj on Sept 9, 2019 7:06:19 GMT
A few comments, (i) this is not a P2P company any more so people should stop thinking of it that way, how can it be P2P if you don't choose the loans and they intermediate for you, and (ii) the business model is not buckling due to any recession, the problem is reckless expansion. their goal was to lend more than the entire UK banking sector. that is frankly insane. investors and lenders have paid the price, whereas the owners and management took their money and ran (there was no lockup period on the IPO and all the company insiders sold immediately). Advertising heavily on TV with loans from 1.9%. Whoever set the IPO offer price of 440p shouldn't be in business. They clearly had no understanding of FC's business model of unsecured lending & volume of bad debts! The IPO was misrepresented.
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bigfoot12
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Post by bigfoot12 on Sept 9, 2019 7:09:00 GMT
Whoever set the IPO offer price of 440p shouldn't be in business. They clearly had no understanding of FC's business model of unsecured lending & volume of bad debts! The IPO was misrepresented. Their client is the seller, not the buyers....
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Stonk
Stonking
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Post by Stonk on Sept 9, 2019 7:56:03 GMT
Advertising heavily on TV with loans from 1.9%. Whoever set the IPO offer price of 440p shouldn't be in business. They clearly had no understanding of FC's business model of unsecured lending & volume of bad debts! The IPO was misrepresented.
Like so much else, FC's "from 1.9%" claim is very misleading.
Although I am no longer active, since they started offering rates from 1.9%, I purchased 851 loans. Only 2 (two) of them were at 1.9%. There were also 2 at 2.7%, 21 from 3.0% to 3.9%, and 11 from 4.0% to 4.9%. The vast majority were 5.0% and above.
Finance companies have to prominently specify a "typical APR" which more than half their customers will attain. Watching FC's advertising, the most memorable figure the viewer takes away is 1.9%, which is only attained by a tiny minority of borrowers.
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reinvestor
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Post by reinvestor on Sept 9, 2019 9:00:25 GMT
Finance companies have to prominently specify a "typical APR" which more than half their customers will attain. Watching FC's advertising, the most memorable figure the viewer takes away is 1.9%, which is only attained by a tiny minority of borrowers.
That is only for regulated agreements i.e. consumer finance where 51% of all loans have to be issued at the typical APR quoted.
As all of the loans that FC do are to businesses only and are hence unregulated, they can claim what they like.
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Stonk
Stonking
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Post by Stonk on Sept 9, 2019 9:13:08 GMT
Finance companies have to prominently specify a "typical APR" which more than half their customers will attain. Watching FC's advertising, the most memorable figure the viewer takes away is 1.9%, which is only attained by a tiny minority of borrowers.
That is only for regulated agreements i.e. consumer finance where 51% of all loans have to be issued at the typical APR quoted.
As all of the loans that FC do are to businesses only and are hence unregulated, they can claim what they like.
Yes, I know why they can get away with it; I gave the consumer regulations just for comparison. The regulator considers that it misleads consumers (as opposed to businesses) to claim what only a minority can achieve, so by the same logic it is just as misleading to a business ... the difference being that a business has to accepts a lot more caveat emptor. Philosphically, I'm not really sure why that is. Sure, business is a dog-eat-dog world where the unwary get shafted ... but should that extend to actively misleading business? Discuss. A few years down the line, maybe it will be The Next PPI.
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reinvestor
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Post by reinvestor on Sept 9, 2019 9:20:37 GMT
I don't think so as unregulated agreements don't even have to state an interest rate (either per annum or APR) so it would be hard to be the next PPI.
Businesses are deemed to be able to assess risks whereas the consumer is needs to be protected. That said, the FCA aren't doing a very good job of that!!!
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adrian77
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Post by adrian77 on Sept 18, 2019 9:24:36 GMT
Gordon Bennett! Just checked the share price - 99.7 pence - since March this share price has only gone one way and it is not up! What happens if or when lenders stop investing in FC and at the same time people stop borrowing with FC - answers on a digital postcard...
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dorset
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Post by dorset on Sept 18, 2019 13:45:56 GMT
Borrowers will still be there given that you can have as much cash as you want with limited DD and then simply go into liquidation (another default today 38552 my sixth this month).
As to the share price then it has no theoretical bottom other than 1p given that FC has no assets to speak of and a business model that will never deliver positive earnings. At some point the cash burn will have burnt through and FC will be seeking fresh finance – good luck with that one.
As to lenders then everyone on this forum seems to be getting out.
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blender
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Post by blender on Sept 18, 2019 14:25:24 GMT
Borrowers will still be there given that you can have as much cash as you want with limited DD and then simply go into liquidation (another default today 38552 my sixth this month). As to the share price then it has no theoretical bottom other than 1p given that FC has no assets to speak of and a business model that will never deliver positive earnings. At some point the cash burn will have burnt through and FC will be seeking fresh finance – good luck with that one. As to lenders then everyone on this forum seems to be getting out. Yes, on some of my loans the word 'borrower' seems to be a euphemism. Not exclusive to FC. There seems to be an increasing belief that repayment of p2p loans is optional.
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