Neo Energy Metals Share Discussion Threads

[stewjames] 17/3/2009 01:06

On the cash issue, given the current financial industry woes, it would not be at all surprising if the rules have recently been tightened up as to what NEO can and cannot claim as free cash.

If you're worried about it, might be worth asking the company.

[whatgoesupcomesdown] 16/3/2009 23:10

I must admit I am worried. Although I do not necessarily agree with 25¢ (referring to the collusion of board members). I do not believe anyone would take such a large position without thorough research. A large position such as this, cannot be unwound quickly, and the seller knows this. This makes me believe the reason why the position was taken is not apparent yet. Whatever profit gained so far would be more than wiped by buying in it back.
Further the selling was organized to drive the price down – 400,000 sitting on the bid every day, and following all the way down – (I haven't had the possibility to check since the update, is it still happening? –L2 people?- This –to me- would show someone who needs to get out double quick (but then not really at whatever price otherwise the share price could have been properly trashed- when we were at 60p, if the seller needed to get out why not put 1,000,000 at 40p and you are out!) but then it doesn't explain the On Loan data going up and up. –No, face it someone is shorting.
Now there are a few possibilities –and this is definitely not exhaustive-
- A short, in its most simple meaning, someone investigated the accounts (?), saw something (?), or expected NEO to make a big payout (?) and based on this decided the share price was way overpriced (PS I don't know what it is).
I further believe, if this is the case, NEO (DD?) has had a hint, hence the delayed update and the slight change of tone (including the write off (!))
- A simple method to keep valuation in check. (ps in that case short is covered by existing share holding) –understand as you want-
- DD took a position via derivatives a very long time ago, then converted to stock (why now?) When he converted to Stock was he actually intending to sell the lot? –The idea being to use the "BID!! Coming" hype to offload- Is he unwinding his position now?, has he been ever since he converted to stock? (using derivatives). Was the update delayed and rather tamed because of the unwinding, otherwise could been seen as ramping the shares up so shareholder(s) can get out. Why does he want to sell? –that's the worrying part?

RE Cash position, I do not agree with you 25¢, the Free cash do not represent cash for NEO valuation purposes:
Think of it in those terms: if NEO were to give all customers's deposits (that's not NEO's money) to a third party (for argument sake!) , all the regulatory cash (on top of deposit) would stay NEO's property, the third party would have to cough up the regulatory cash if their regulator requires it. So All regulator cash should count toward company valuation – including cash with processors (what is the meaning of not counting –in effect- cash in transit!!) As an example of this let assume you are "worth" $100,000 and you transfer all of it from Your account A to your account B and transfer take 5 days, YOU ARE STILL WORTH $100,000 even as the money "Travels" –even if it is not free money –ie you cannot touch it!-. In the update NEO was playing down –big time- any return to shareholders (for which only free cash could be returned).


I don't know. Any thoughts?

[onionbhaji] 16/3/2009 19:11

ref 421
OH HOW HORRIBLE.
lol

[castleford tiger] 16/3/2009 19:05

25 CENT

I shall not rise to your petty remarks.

If your research is as good as you thinking that AIM companies have just 3 months to report then we are in big trouble.
see note
An AIM company must publish annual audited accounts which must be sent to its
shareholders without delay and in any event not later than six months after the end of the
financial year to which they relate.

Yes i am a Co Director, a Non-exc and a Chairman. So please do not try and blind me or others with your FACTS.

They are nothing more.
Even the cash situation is wrong. Read the statement again, and again, until it sinks in.
NEO is a fast growing company, and your suggestion that the directors of the PLC have held the trading statement back to allow the share to be shorted is a serious allergation.
It has no founding other than you say 13% of the shares are on loan to shorts. You have also stated that the above was held back to allow the shares to be dumped by a big holder. Again this is serious.
You also suggest that the holder has failed to inform the company ( i think in one post you said it may have been a board member)

I have no axe to grind with you but there are people who take every word you say as fact. As i have proven they are often not.

Yes you have said several times that you called the price right as it fell. My charts also told me it was in a down trend.
Markets are imperfect and these shares unloved, but this company is making money after a very difficult time with its USA problems.
I remain of the opnion that DD will bid for NEO and this year. I would also suggest that the shares may remain flat until that becomes public.

In the meantime use my proper name or at least offer to buy me lunch so we can discuss this face to face.

Mr Castleford Tiger

[onionbhaji] 16/3/2009 16:28

Thanks for the info 25cent you personally stopped me buying this at 45p with what you said.
How on earth poeple can have a go at you when everything you said transpired just shows you how unable some are to admit they got it wrong!
cheeers

Andy.

[guidfarr] 16/3/2009 16:19

36 mr pessimist

[25cent] 16/3/2009 15:19

"Ding dong the wicked witch is dead" only kidding! ;-)
Strangely enough stew your opinion is almost the exact same as mine on neo.

"Not that I think it's a bad business either, just not one that interests me at this price given their intent to spend the safety net."

100% agree with you, and thats the reason imho ( intent to spend the safety net) NEO is at 35p and falling everyday.

[stewjames] 16/3/2009 15:17

Given that I'm no longer considering buying and that I don't think we have a constructive conversation going on right now, I'm ending it from my side. Feel free to have the last word!

[stewjames] 16/3/2009 15:14

1) What? If your quote did not assume I was holding shares (OK, I'll give you the benefit of the doubt) then it did at least assume an opinion I did not hold.

2) Glad that's cleared up.

3) OK, bad phrasing on my part. I think my recent post should make it clear what I mean from context though. I don't think it's a particularly good business without the *American* poker related income. Not that I think it's a bad business either, just not one that interests me at this price given their intent to spend the safety net.

[stewjames] 16/3/2009 14:43

1) OK, if you prefer, I will accept you jumped to incorrect conclusions about my opinion rather than my shareholding.

2) No, you don't understand at all. I was just giving a *possibility* why somebody may have shorted that doesn't require insider trading. And whilst I have not said that I think the company is not being shorted at all, that too is not impossible. We have stock lending figures. That does not always equal the volume of shorting.

3) Why's this hard to understand? NLR was a fantastically profitable business all off the back of gaming related income. Just before the UIGEA, they were on a $100M+ per year *net* profit run rate. Now, gaming is barely enough to eke out a net profit at all. I'm sure they would have embarked on diversification even without the UIGEA but the difference is they would have had very strong cashflows to use during that process and the results of any diversification would have been a potential bonus to an already extremely profitable business.

[25cent] 16/3/2009 14:07

I must say i am totally baffled why snowman/castlefordkitty is not using this "market anomaly" in Neo's price to buy his wealthy clients chuncks of this outstanding bargain of the year share?
Maybe his level 3 trading quote system is playing up???' lol

[monosodiumg3] 16/3/2009 11:03

>the only real competitor to NEO is moneybookers
AFAIK NEO is active in 3 sectors: prepaid cards, payment processing for merchants and the gaming accounts. The last of these has in the past been the core business, with the payment processing being second and the cards (Net+ and now Prime) being a recent addition. In each of these areas there are different competitors.

I know that in prepaid there is are few serious players and I THINK Neo have a better chance of making that work than most of the other players who are a bit lightweight and do not have Neo's depth of experience in payment system.

The merchant payment processing is trickier. There are plenty of serious and bigger competitors. This is IMO an area where once upon a time feature set was primary but pricing has become now more significant. There is also the PCI DSS issue. Huge numbers of current online stores are currently in violation and the card networks will gradually clamp down, forcing most merchants onto alternatives. Whether Neo is positioned to win or lose there I don't know.

The gaming payments service is obviously the legacy piece but that platform provides a number of features that can be sold outside the gaming sector. Combine it with the cards, and you get an account with a very broad set of features on a well-developed i.e. efficient platform. I think therefore that they have the opportunity to develop a product that competes on feature set and price and, with Prime, they are not starting from scratch. The gaming piece is more mature in that the rate of growth of the customer base is decreasing.

BTW, the best possible arpu from non-gaming clients is far far below the reported arpus for gaming users. The turnover per account will be a lot lower and the greater competition in that space will keep the gross margins lower. I expect arpus on the gaming side to slide as competition for market share drives down fees.

Prepaid as a market is growing much faster than credit cards and is set to become huge. Gaming clients are the low hanging fruit and probably much closer to peaking. Profits are still relatively easy to achieve now but eventually they will go to the most efficient operators. Neo's presence in Asia and eastern eu could a big bonus compared to many other players who are US/UK focused. Your starter for 10: which country in the eu has the most prepaid users?

@25c:
1) No idea about the timing. Whatever I or you say on that will remain opinion and not demonstrable fact until disclosure. "DO YOU THINK" invites an opinion, it does not state a fact. I THINK the absence of takers on that one suggests a general lack of conviction either way. I agree it smells a bit but that's a comment on the appearance, not a statement that I am convinced its dodgy. If it is dodgy then it seems to me extremely well done as the shorter got it down to exactly the post-statement equilibrium price just before the statement.

2)Don't understand the $8 x 8pe = ($ i assume)0.32 calculation.

3)Returning the cash to shareholders would be odd indeed at a time when cash is very hard to come by and they are in the middle of a business development plan. In fact it would make them pretty much unique at this time.

4)The write-down is disappointing, but as another poster pointed out, a lot of companies are being forced to write down values. I don't believe that's the true story though. I'm guessing they have failed to achieve what they intended with that acquisition and are throwing in the towel on it. Writing it down keeps the books straight and avoids having to admit they failed to make it work. It also enables them put the Netbanx business up for sale at a price that we would otherwise be livid about. All IMHO of course.

[castleford tiger] 16/3/2009 10:54

25 per cent.

You have done a great job in warning us all about the dangers of the investment.

You are a fantatist. You dream things up and then shout enough people down you then think you are right.
You are wrong with the dates its not 3 months.
You are wrong that Desmond wants the price down so he can offer a low price.

maybe some of what you say is right but you then put the Labour spin on it and it rather spoils things.
Take a chill pill, relax and if you are worried the market is having you pull out.

CT

ps i have been to Snowmans office in the UK and seen the set up. Its pretty impressive and the man does know what its about. He is looking after some very wealthy private punters and does make them money.

[stewjames] 16/3/2009 05:10

Stew tell me now, just were did i say you had any shares in NEO?


Here:

So i guess what your saying is that your right and the market is wrong, well good luck fighting the wrong stew.

Not a relevant comment unless I held.

Stew your another one that simply will not answer my question about the timing of this 13% short and withheld trading update that shall we say has a few surprises in it?
What's your take on it Stew? are you in the inspired timed short camp?


I thought I already had answered. You have given me no convincing reason to think it is insider trading. Haven't you yourself been banging on for a while about the trading statement being delayed? (apologies if not, I can't be bothered to check) That in itself is usually a sign of bad news and could be the final straw in a decision to short.

BTW it still has poker related income, youve lost me on that one??????

Yes, but considerably less. It was the foundation of this business and what remains is no longer sufficient, hence the cash hungry diversification.

[stewjames] 15/3/2009 22:26

25cent, you leap to conclusions about my interest in the share on just as loose evidence as you leap to conclusions about insider trading. You are definitely wrong on the former, and probably on the latter.

I've been keeping an eye on this for a while. I didn't buy because I didn't share the consensus that it's a particularly good business without the poker related income. The recent update strengthens my opinion on that so, with the cash safety net also disappearing, I will not be buying any time soon.

[guidfarr] 15/3/2009 22:09

well that's the way it goes - take advantage of recessions and continue re-investing keeping yourself ahead of the pack - expand while your competitors contract or at the most remain as-is, on the positive side the competitors of neteller who don't have the luxury of cash reserves will find that it is hard to borrow money during this time so for them it is either a survival or doom scenario. I don't think the recession itself will hit NEO's volumes that much, their business is global so any contraction will be contained. I know that NEO has a strong balance sheet and has the financial resources to endure the recession and that pretty well addresses one of my concerns

And the recession almost makes it impossible for new entrants to find the funding to launch - you only have to look at ivobank - when it launched last year there was an explosion in traffic now it's traffic is practically non-existent. Look at click2pay - the company is stagnant - the only real competitor to NEO is moneybookers.

As for answering points - I'm not here to give you answers but to share research - the other posters in here have done a good job at explaining some of the intricacies. I'm not an analyst and I don't pretend to know a lot buti don't call other posters morons - i simply specialise in the gaming sector and follow everything that is going on in the sector.

And AGAIN I REPEAT IT - I don't know who is shorting Neteller but I'm pretty damn sure that when we check the percentage on loan next month this will have increased!! That would means that a considerable number of those 'sells' would have been artificial selling. SOONER THAN LATER THERE WILL BE A BEAR SQUEEZE - at the present trading levels i see more upside than downside risk and the fact that someone is trying HARD to push the share price of this company down makes me smile because for me the amount on loan are future buys.

I don't know who said the markets were efficient and regulated - I'm seeing manipulation on a grand scale and not only in NEO no wonder experienced traders tell you to stay away from the share markets unless you have inside information.

[25cent] 15/3/2009 22:03

LOL so the penny has dropped then????
You know what your so right its obviously better to spend $38 million on the newteller software program in this deep recession! silly me!

Have you notice Guidfarr i answer all your points instead of just picking out one sentence to respond too?
You missed the one that said "That's more or less where it stands today, so my quip is , was it worth blowing all that cash?

[guidfarr] 15/3/2009 22:01

'I would rather the cash be returned to teh shareholders and neo be run as an existing company with organic growth.'

Do you really think that a company in the middle of the credit crunch - with full-blown recession going on and when it is so difficult to borrow money is going to return its cash reserves to personal investors just to accomodate you and then end up in a shoe-strings budget!!!? My experience with similar companies is that they want to get bigger and bigger...I'm really starting to think that you have a different agenda in mind - an agenda which goes against us personal investors.

I don't know who is shorting Neteller but I'm pretty damn sure that when we check the percentage on loan next month this will have increased!!

[25cent] 15/3/2009 21:56

Hi adho.
i don't think its going bust, i think it will trade on its Profits now that its has or is going to spend the 48p per share it had in cash.
Unless it makes more than the census of 8 million next year the average p/e of 8 puts this at 32p.
That's more or less where it stands today, so my quip is , was it worth blowing all that cash?
I would rather the 48p cash have been returned to the shareholders and neo be run as an existing company with organic growth.


Guidfarr.
If you want to ignore the facts and company RNS and just spout some stuff about netteller then go ahead.
"at some point he will buy back - that will rocket the price"
I have been hearing that sine 260p so dont hold your breath too long will you .