Internet Business Share Discussion Threads

[the analyst] 15/12/2007 00:36

cheers, Stemis.

"Presumably Maz believes the growth potential of TMN and the synergies with IBG are as good as the growth potential of IBG alone."

Hopefully, that is the case, but there could be all sorts of other explanations. It's been so difficult to fathom the reason behind any of the decisions over the past 10 months, that it makes it equally difficult to understand whether this latest change of mind is a well thought out plan or not.

Would it be fair to say, though, that we now have what look to be committed management with a clear undertsanding of what their long-term goals are?

I hope so

[stemis] 14/12/2007 23:37

ta,

Just passing on my impressions.

I don't understand anymore than anyone else why Maz has chosen the worst possible time to do this deal. As I've said before; IBG shareholders have taken all the pain now Maz has handed over 70% of the 'potential' gain to TMN shareholders.

I struggle to understand the strengths of the TMN business. It seems largely build around emailing advertising material to internet users who have been induced to opt into email marketing by various ploys.

Presumably Maz believes the growth potential of TMN and the synergies with IBG are as good as the growth potential of IBG alone.

I'll probably give it a while, certainly till the TMN finals, but I don't think I have the long term commitment that I had with IBG. It seems like the end of an era but I guess like many, in retrospect, I hung on too long. If TMN shares hit 84p or so (equivalent to a 2009 forecast P/E of 12) I think I'd be out. That would be equivalent to an IBG price of 22p. I never thought I'd take that sort of price for IBG but I guess its all different now.

[coffeelito] 14/12/2007 23:11

Maz is a poor communicator in person, he can bore the pants off you, and i always suspected this negative attribute was somehow reflected in the bigger picture. After all, k.i.s.s - keep it simple, stupid! If you can't boil your vision down to a few choice words then perhaps u aint got a vision at all.

[the analyst] 14/12/2007 22:03

Being interested in history, I find it fascinating to look back at the old IGB vs ASC debate that seemed to go on and on (and on) a couple of years ago.

It was thought here, at the time, that IBG were in a far superior position because they would benefit from a 'compound' growth - not only would they get the growth from the overall increase in spend on online advertising, but also the growth from increasing merchant numbers and on top of that the growth from improving the quality of the merchants on offer. Then there was the international expansion to add to that...

How, then, did ASC manage such a phenominal revenue increase compared to IBG?

ASC are growing revenue at over 100% pa, whilst the latest results have show IBG's AffiliateFuture to have grown revenue at only 30% during the period. This is well below the UK's overall increase in online ad spend for the year, nevermind the (compound) increase that should have been seen due to the new merchants added and the much talked about increase in the 'quality' of the merchants.

Stemis, I don't see why Maz is 'disillusioned' with investors and the market. Surely he should be asking himself why IBG failed to meet those 'conservative' market expectations for revenue growth?

ASC seems to be trading on a decent forward PE and, of course, the market loves them...

The company missed ALL forecasts. When you spoke to Maz, did you get any clues as to why he thinks investors and the markets are key to the low share price and not the performance of the company?

Don't get me wrong, I like the chap, but sometimes you have to put your hand up and say that you did not perform, rather than pretend it is the fault of 'the market'.

[kenatbabken] 14/12/2007 21:50

Om

I agree that he seems to of had enough and will receive about £2m but he,s
locked in so won,t qualify for the 10% tax that runs out in April 08 and therefore after tax (Based on current TMN SP) Will end up with £1.64m when
even if he,d took a back seat and let someone else run it could have received
a lot more over the next 5 years

[omlaysause] 14/12/2007 21:05

Ken I think Maz has had enough of trying to run the company and he's still walking away with a few million.
It seems to me now, that the board saw the writing on the wall and knew something had to be done and saw this as their only way out. But they've once again shown us their ineptitude by letting this company go for buttons. There is absolutely no reason to have let IBG go for this price unless they knew it was struggling and I think when they announced the RNS in the summer that was the start of the slide. I'm not saying they lied but I think they have certainly been buying time to try and find a solution or an alternative and it isn't working. I think something has happened/changed over the past 6-8 months that has caused the whole thing to slow and they haven't found a way of stopping the slowdown or anything that will add to the turnover in the timescales needed that would allow them to maintain their targets.

[aleman] 14/12/2007 20:59

I'm out now, having sold the rump of my holding today. The market has been merciless to smallcaps this year so I think IBG were unlucky in timing their problems. I'm pleased to say I was early enough in and lucky enough taking profits to have done very well. My commiserations go to those who have taken, or will have to take, a loss. I have had plenty of those elsewhere this year and will be down overall. I was quite tempted to stay the course as both IBG and TMN look undervalued, but there are other undervalued companies out there that seem to have a much clearer vision of where they are going. This sector seems so unpredictable and my circumstances suit less risk now. I hope the merger works to the benefit of IBG's current shareholders, directors and staff and would like to compliment again those who have made this thread so informative, friendly and interesting over the past few years. They have made it one of the best on ADVFN. It has been a pleasure to meet some of them in person and, hopefully, we will have the opportunity to cross paths again in the future. Good luck.

[kenatbabken] 14/12/2007 20:43

Crazy price in my opinion Director buys at 16p Directors sell at 12.75p. Take
out the cash, the value of the warehouse they bought and the value of Sweatband
and gadgethub (The Etail side will surely be sold off) perhaps Maz will take it
and the directors seem to have sold out for not much more than £7m

I live in hope that the 51% of shareholders who did not agree to the deal will block the takeover but I doubt it

[omlaysause] 14/12/2007 20:39

Well I for one will be giving it until TMN issue their next set of results but I'm heartened that Maz is no longer involved in the management side of things.
Stegrego, you obviously know both companies, can I ask what's the big difference or benefit you feel TMN have over IBG (apart from management)?
I also asked on the TMN board earlier what the share price may be over the next 2 years ... any thoughts.

[stegrego] 14/12/2007 20:26

Perhaps you are right, just feel that any recovery TMN might have been going to make in the short term may now be held back by disgruntled IBG owners selling their TMN stock...

[omlaysause] 14/12/2007 20:18

Stegrego I certainly agree with the smoke and mirrors stuff but you surely have to be kidding if you think 12.75p is a good bloody deal!!

[stegrego] 14/12/2007 20:00

As a TMN holder and ex-IBG Im slightly miffed that i will now own something i sold because i didnt consider it worth holding anymore.

I personally feel that you lot are getting the better deal as now you may get some decent management instead of smoke, mirrors and jiggery pokery.

[stemis] 14/12/2007 19:52

Interesting (although academic) that after all our discussions about cashflow the actual cash balance turned out to be quite a bit better [£1.691 million] than the trading statement [in excess of £1.5 million].

[the analyst] 14/12/2007 19:16

Cheers Ken, got to say it does surprise me that you were not contacted as a major shareholder.

I seriously doubt there was ever a bidder. If anything, I suspect there was only an 'indicative' offer which, of course, is totally meaningless.

Maz was telling us how 'the investors' would not let the company go for less than 40p and possibly not even 50 or 60p - he told us that is why no offer could be accepted. I seriously doubt we will ever find out what has really been going on with IBG over the last 10 months.



How things have changed since the last Finals, when the share price stood at 27p:

"PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2006
Internet Business Group plc, the AIM listed performance advertising and
e-commerce company, is pleased to announce preliminary results for the year
ended 31 October 2006.

Highlights:
* Turnover increased by 112% to #13,404,593 (2005: #6,321,579)
* EBITDA increased by 187% to #1,208,208 (2005: #421,344)1
* Full year retained profit increased 150% to #1,102,917 (2005: #440,693)
* Net assets increased by 129% to #3,406,972 (2005: #1,489,660)
* Launch of IBG Media
* Good progress for AffiliateFuture in the US market.

Trading since the financial year-end has remained in line with management
expectations. The Board remains confident of achieving market expectations on
profit before tax for the current financial year, whilst significantly
increasing the infrastructure to facilitate the future growth potential of the
Company."

[omlaysause] 14/12/2007 13:35

Well it looks like the stock market is completely underwhelmed by the whole thing. Kind of says a lot about the deal eh!!?

[bonio10000] 14/12/2007 12:36

Well - those offers for 30p to 40p a share in cash 6 months ago look good now.

Having been through the finals - hardly inspiring. UK growing okay, USA and Europe peripheral and not much happening, online retail a waste of time.

[moob] 14/12/2007 12:33

lol. crazy offer. the only one available for IBG was to take untradeable toilet paper in the form of TMN. lolol. Will Maz be quietly selling his stake in the market afterwards.....as he will not be a director....

[liarspoker] 14/12/2007 12:25

I think that Maz will have a big weight lifted from his shoulders so good for him.

If I was still holding I know that I'd be disappointed too so I feel for the shareholders. I've looked at TMN on a few occasions and decided that IBG was a better company in all instances. Keeping the fingers crossed for synergies etc for those that will continue to hold. Good Luck.

[stemis] 14/12/2007 12:23

I don't think TMN's paper is any more highly rated than our own.

[coffeelito] 14/12/2007 11:41

I have friends in the industry who tell me Maz often said how ibg would be bought out, but his clear implication was that it would be for a big fat premium - the icing on the cake of share price success. I have to say I am as bewildered and disheartened as many others at how events have turned out. It looks like there was no real Captain to our ship, just a bunch of first-mates. Look at TMN's share price growth compared to ours over these past few years - they are getting a great deal using much higher valued paper to acquire ours, which is where it was all that time ago when I invested in IBG. What a shocking waste of time and funds as an investor. Maz has been all over the place this year and we have paid a very heavy price for his lack of business acumen in running a plc. Extremely unhappy about all this!

[coffeelito] 14/12/2007 10:52

ok, thanks.

[baheid101] 14/12/2007 10:50

there is no capital gains tax or Aim taper relief implication because the merger is not classified as a taxable transaction - there are no disposal proceeds because it is a nil-premium all shares merger. Your base cost for CGT remains the same, its just your IBG shares will become 'new' TMN group shares.

[coffeelito] 14/12/2007 10:44

I'm confused: what is happening to our shareholdings in IBG? We're not being offered cash but shares in TMN? If so, what does that mean in terms of capital gains tax and Aim taper relief? Thanks.

[baheid101] 14/12/2007 10:42

whats Google got to do with it?

email marketing and affiliate marketing are two increasingly important channel's within online marketing and the combined group has strong positions in both