Fairfx Share Discussion Threads

[microscope] 13/8/2014 19:35

QP, always starting with the 'let's hope' style line, lol... and then repeating the same point, perhaps if you spent less time fretting on one minor issue and looked at the wider picture you'd sound less stilted, you'd see the fundamentals are far more important. :)

Take OMIP which has a tiny free float, was 1p on Plus, 4p when it joined AIM last year, now about 15p. Good fundamentals driving demand and far more important than liquidity.

We get your point but it's a dubious one at best as several of us have explained, hey maybe your interest is motivated by something else...? ;)

[quepassa] 13/8/2014 17:46

Maybe. Let's hope it works out that way.

But there is a lot of market evidence and indeed rafts of academic financial research as to how negative a small float can be on share prices and liquidity.

Personally, I view it as distinctly negative - to use your words- that "the owners want to give away as little as possible". That's just it. That sums it up. You have hit the nail on the head.

That's how the market will also perceive this share - as a closed shop run by the owners for the owners. That's a really bad flotation strategy in my view. It doesn't raise the profile at all.

Look at some tightly held other shares and they have little profile because there is so little availability of stock.

I have to believe that their various advisors would have alerted the Company to the potential pitfalls of a such a tiny free float.

As a rule of thumb, anything less than a free float of a bare minimum of around 40% really hampers a share in my view.

But good luck. It seems a nice underlying business.

But the existing shareholder structure vis-à-vis potential new institutional/retail investors is in my view deficient, if not defective.

ALL IMO. DYOR.
QP

[charlieej] 13/8/2014 15:04

I don't see the small float as a negative. It backs up the statement that they are using it to raise the profile of the company. If they had released a huge number of shares and the founders had taken a cut I would have concluded that they saw the growth potential of the company as limited. What I see in such a small float is a company where the owners want to give away as little as possible as they believe in the company's growth potential whilst raising the profile to help them take the company to the next level.

[loadsadough] 12/8/2014 16:11

FairFX TV Ad - For a Fair Foreign Exchange Rate - FFX
- Today, 4:10 PM

FAIRFX has taken a revolutionary approach to the whole foreign exchange market for both individuals and businesses. We cut out the middle man and use state - FFX

[quepassa] 11/8/2014 11:39

Yes. it looks like a good business.

But it is counterproductive when so few shares are on the market. Smaller Shareholders who buy on the market will have zero voting power effectively.

It is also inevitable in my experience that some existing shareholders will want to cash out. Having such a tiny free float makes owning these shares tough and unattractive in my view.

Small companies need to learn that tiny free floats are a big negative for prospective shareholders. Institutions have historically shunned investing in companies with a small free float.

Shame really, because otherwise an interesting business.

ALL IMO. DYOR.
QP

[microscope] 11/8/2014 08:36

Yeah Charlie, hope to follow you in. Liquidity is not an issue for me, take QP's point but a small float can also lead to demand outweighing supply and works equally both ways. Been in plenty stocks that have also benefitted from it over the years, if the company's quality is good enough :)

[leeson31] 08/8/2014 16:03

+£300m revs, and margins sub 1pc. highly priced to earnings, but good growth expected perhaps. agree re QP's comments on spread and share structuring.

[quepassa] 08/8/2014 09:43

The bid-offer spread on Fairfx shows as 46-48p.

I tried a dummy BUY order this morning with a major online broker.

I could have bought 25,000 shares at the Bid price of 46p.

Unusual to be able to buy at the Bid. One wonders what firm price a broker would give for a Sell order.

In my experience, it is likely/normal that some existing shareholders would want to sell parts of their holdings after a flotation/admission. On that thesis, I personally don't see a buoyant market for this share given the tiny free-float irrespective of any good underlying business.

ALL IMO. DYOR.
QP

[rocheberie] 08/8/2014 08:40

Quepassa

Morning, yes I was interested in Cattles and unfortunately lost money due to financial irregularities, for which the Finance Director, The Chief Operating Officer and The Compliance and Risk Director were dismissed without compensation. Such is the life of an investor!

[quepassa] 07/8/2014 18:06

Ah yes. I remember you.

The likely lack of liquidity in this share and its tiny free-float make the share unattractive in my opinion, irrespective of their product which is probably very good.

Not enough shares have been placed in public hands in my view. Too much of a share overhang by existing entities and directors.

ALL IMO. DYOR.
QP

[quepassa] 07/8/2014 14:47

This is a copy of a post which I put on the Cenkos bulletin board which makes reference to FairFx.

Liquidity in this share will in my view be pretty non-existent and public shareholders would in my view be at the mercy of the major shareholders.

Quote:-


Fairfx is admitted to AIM today.
Cenkos is Nomad and broker.
A small amount of shares are Placed. The balance remain with existing shareholders.
Gross Proceeds of Placing £2.6million.
Estimated Net Proceeds £1.7million.

I guess that a fair chunk of the £900,000 in expenses/fees will be for Cenkos.

I'd like to consider buying shares in FairFx as the sector may be attractive, however with the small anount of shares in public hands and some shareholders with massive stakes, I don't think I will.

But looks potentially like another nice little earner for Cenkos in what will undoubtedly otherwise be a quiet month due to the holiday season.

ALL IMO. DYOR.
QP

[kloos2] 07/8/2014 09:57

The service that they offer is really good. The best out there for $ cards. I say this as a customer and I did a lot of research before becoming one. No idea about how the share price will perform but they have started at a reasonable level without overvaluing the company.

[errollc] 06/8/2014 10:13

I wouldn't get overly fussed about the Non Exec Chairman of Fairfx. The CEO is a hard working guy who's done really well...and the company itself is flying. The backers are also high profile, money makers (Chris Levett etc) who know what they're doing.

Think this one will do well....

[microscope] 06/8/2014 08:20

Who is ShareSoc? Always a basic starting point and wise to know a bit about management I'd have thought.
Just wanted to start a thread as it was a company I'd heard about, no judgement from me at this stage as to the quality or otherwise of investment worthiness here, just one I'll be spending some time checking out, as it looks interesting prima facie.

[davidosh] 05/8/2014 21:52

When a company is brought to market it is always worth checking the previous history of the chairman and what public companies they have headed up and how well they have done for shareholders under their stewardship ?

It appears that ShareSoc members flagged this up

[simon gordon] 05/8/2014 19:58

Tech Market View - 5/8/14:

FairFX joins the lists

FairFX, a low-cost multi-currency payments provider, started trading on the AIM market today. (Ticker FFX). A placing raised £2.6m to fund marketing and further develop its portfolio of transactional services including pre-paid cards, money transfers and corporate expense management. The market capitalisation of FairFX at the issue price of 45p is £30.5m.

FairFX, founded by a couple of ex-Morgan Stanley executives, has been in business since 2005. In FY 2013, revenue totalled £322m, up 46% on the previous twelve months, with gross profit of £2.8m. On their website they state that they have taken "a revolutionary approach to the FX market", using a proprietary, cloud-based peer-to-peer payments platform to provide its customers with better rates and good service by "cutting out the middle man". We shall see, but many people travelling or doing business abroad will certainly welcome disruption in this market as long as it leads to lower charges and better customer experience with the correct level of security. FairFX is licenced as a Money Service Provider by HMRC.

In UKHotViews we have recently written about many companies in the money transfer and remittances market, see here. Certainly there is underlying growth, in terms of overseas travel, cross-border business and remittances from migrant workers. Companies with good technology, domain expertise and capable marketing should be able to generate scale and margin to build long term returns. FairFX now adds itself to the list of companies bidding to succeed in this increasingly crowded environment.

[microscope] 05/8/2014 14:05

New company on AIM today Fair FX, FFX, currency provider. I've heard good anecdotal reports and saw them mentioned by Sky News contributor Sarah Willingham as being a good value provider, but know nothing of valuation or potential value.

Anyone?