Best Of The Best Share Discussion Threads

[peart] 18/11/2020 19:07

I agree, barriers to entry are not high. But that does not make it easy. By way of example, a huge number of people try blogging and social media activity, to say promote, by way of example, makeup. Barriers to entry are minimal, probably 0 on your scale Solooiler, but very very few are successful and make a lot of money from such activity. Some however do, yet I would argue that their success is not that easy to copy.

In any event the proof will be if a decent offer is forthcoming or if rampant competition comes in and steals BOTB's business. Or perhaps no offer comes in and BOTB continues to prosper and fends off any new competition that comes to the table. Time will tell...

[serratia] 18/11/2020 18:45

The interest must be above the M.Cap or they would have walked some time back. If the parties thought they could do it themselves for less than £130m they'd have walked away or not even shown any interest.
My guess is they came in with interest at a premium but were told not enough. The parties said that's too rich in relation to profits. BOTB during July/August/September accelerated the growth rate to show what can be done. Interested parties would be waiting to see what could be done and to see the half year figures at the end of October.
During November from the RNS they haven't walked so I guess they're in competition with each other.

[solooiler] 18/11/2020 18:19

It's a bit contradictory to keep saying 20 years. This business has only really been turbocharged with online which is a much shorter lifespan and the simple fact they can put (what 500k to 1.5m or something) into marketing last year to drive massive revenue growth is simple evidence of the lack of barriers to entry and repeatibility.

Think about it.

Serratia. we have no idea how much interest the parties have in botb. activity slowed during the summer. if they were excited to their back teeth with botb, why would activity slow over the summer? They would be looking to close the deal asap

Peart. Rank BOTB's barriers to entry on a scale of 1-10, 10 being hardest to penetrate. Amazon at 9 out of 10 for benchmark purposes with huge network effects, distribution channels, scale, sunk investment. I'm not giving BOTB more than a 3

[peart] 18/11/2020 18:13

I'm with you serratia. If it were that easy to compete and build a similar business with similar profitability and growth, others would follow. I believe it looks easy to copy many successful businesses on paper, but reality can be often be a lot more difficult than it may seem. BOTB have been going at this for 20 years and I don't believe that it could be copied very quickly without huge investment and skill. If it were always easy, no businesses' would ever get bought out....

[serratia] 18/11/2020 17:52

Ok why are they still interested ? They know any interest would have to be higher than the M.Cap of £132m. They would have been sent away if their interest was too low a figure. If they could build a competitive set up for less than £132m why not walk.

[solooiler] 18/11/2020 17:33

Interest is different from firm bids.

[serratia] 18/11/2020 17:32

So why are bidders interested ?

[investographer] 18/11/2020 16:56

BOTB has built up its brand over the last 20 years.Check out the competitors platforms, social media & prizes & then decide for yourself.

[solooiler] 18/11/2020 16:35

I could buy Botb for 130m with no premium

Or i spend £1m the set up the exact same game and website and spend £4m on marketing to my much bigger player base if I am a huge gambling company

Barriers to entry are rubbish so this should trade dirt cheap

And this needs regulating. There are some players spending £50 a week on this. This needs maximum entry size regulating like products in the gambling space have seen

[az4hr] 18/11/2020 14:17

agreed Ryan106 but with how well other stocks are doing and the bouyancy of the general market the short term weakness is a major frustration especially if its a big holding

[ryanc106] 18/11/2020 14:01

James Smith, why would it? The company is trading it's socks off and continues to smash eps forecasts. The ROCE is over 100%. It's a rapidly growing 1005 digital business. At these levels it's astounding value imo and I never thought we'd see these proces again to be honest.

People do make me laugh how quickly they change their tune when a bit of volatility occurs ;)

I'm still backing a takeout in the v near future of £20-25 plus. They wouldn't still be in negotiations if the owners and bidders were worlds apart on price.

Someone wants this business and it appears the owners are motivated too.

Very interesting situation

[jeff h] 18/11/2020 12:48

I note from the RNS today private equity is specifically mentioned:-


"The Company, together with its advisers, remains in ongoing discussions with interested parties from a number of sector verticals and including private equity..."

The AGM statement on 16/9/20 said:-

"..discussions with a number of interested parties, from a number of sector verticals..."

..and the original 17/6/20 FSP RNS spoke of "..very preliminary expressions of interest..."

So perhaps interested PE have only recently expressed an interest and are in the process of deciding whether to make an offer?

[jamessmith23] 18/11/2020 12:22

I think if a sale doesn't materialise soon we will see continued falls. I will add if it falls much lower though, but at the current price we need it to continue with a lot of good news to keep the momentum up.If it falls to 11-12 then I think that will be a good value opp

[3ootuk] 18/11/2020 12:13

I've top sliced a few miners to buy some more on the dip.

[ryanc106] 18/11/2020 12:12

Agree with both posts 638 & 639.

Serratia you talk alot of sense

[peart] 18/11/2020 12:03

Just done a small top up as I see current price of £13.75 been £20 - £25 in a few months time, maybe a lot higher with the FSP. Seems like a pretty good risk reward ratio to me....

[serratia] 18/11/2020 10:29

I'm looking at revenue up 50% from H1 last year for the first half. It's only 17 days into H2 and I'm seeing the growth continuing at a high rate so was pleased to see that confirmed in the RNS.
IF they hold the growth at the same rate they should be up 60% for the full year vs last year. The market has valued them at 22 - 24* operating cash flow for the last few years so I'd go for a price of £25 a the end of this financial year based on just under 110p/share OCF.
Upside - Additional revenue from mid week games. Downside additional marketing costs as they pushed the growth rate when bidders appeared.
I can't see a £25 bid being accepted

[3ootuk] 18/11/2020 10:03

A lot depends on the financial position of the Board. You can retire on that sort of money, but how big a super yacht do you want?

[perimore] 18/11/2020 09:29

It would be very unfair to provide an update saying the FSP is ongoing, only to say it isn't happening at an even later date. But it does say there is no promise of an FSP. I don't blame those who are getting bored but I'm happy to wait it out and have faith there will be nice Christmas present for us all :).

[ryanc106] 18/11/2020 09:21

I know what you mean Peart.

I really hope you are correct and I am not :)

If we don’t get an offer before Christmas I’d be surprised. Sounds like the board and the interested parties are all v motivated and want to get a deal done.

[peart] 18/11/2020 09:18

I think with us been as high as £19 this year, that £20-£25 is a bit light for an acceptable bid. Obviously wishful thinking, but I think it's worth a fair bit more than that. I feel £30's to early 40's tops, but obviously it's only worth what someone's prepared to pay and how much the main shareholders are prepared to accept. I just feel that in light of the growth this year and as such anticipated growth for next year that £20-£25 will be baked in in a few months regardless, assuming current trends continue.

[ryanc106] 18/11/2020 09:09

To be honest I was expecting the RNS to say the FSP process had closed with no bidders however because it’s still ongoing, I think a sale is pretty much guaranteed now and probably down to the last couple of bidders finalising the details.
I expect a bid in the range of £20-25

I was probably wrong with my previous bid assumptions of 40-50 multiples it would seem.

You never know though they might surprise us.

[investographer] 18/11/2020 08:32

Investors now getting bored with this one. I can not believe why this has dragged on for over 5 months.It is not a complex company.A massive distraction