dorset
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Post by dorset on Dec 28, 2019 18:39:08 GMT
They dont want retail investors anymore. They are expensive to service, are fickle, and often unaware of p2p risks. Increasingly p2p will be dominated by funds that appreciate its diversification from equity type returns. the main reason they don't want retail investors anymore is that, in addition to your other reasons, they expect to be able to get access to their funds immediately. Lending for 5 years and borrowing on call is not a balanced lending model! The borrow short lend long (bank style) model worked perfectly well for FC in the period to end 2018. It was the rapid rise in defaults that decided lenders to liquidate on mass which then created a type of “bank style” run. If defaults had stayed at the pre 2017 level and returns stayed at a steady 7% pa, which we all earned prior to 2017, then why would anyone (including myself) wish to exit?
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Post by shanghaiscouse on Jan 2, 2020 19:10:44 GMT
You can't say it worked for them, it is just that the conditions had not swung against them. Its like saying Northern Rock worked well until the financial crisis revealed lending over 25 years using overnight funds was not balanced either. Its only when the tide goes out you can see who isn't wearing shorts. Its an inherently unstable model that, once the 5 year borrowing and on-call lending become unbalanced, can collapse. FC themselves refer to this as 'instability in their ecosystem' which they are reducing by effectively reducing their lending from fickle retail investors and selling securitisations of loans to subprime debt funds.
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blender
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Post by blender on Jan 2, 2020 19:28:14 GMT
You can't say it worked for them, it is just that the conditions had not swung against them. Its like saying Northern Rock worked well until the financial crisis revealed lending over 25 years using overnight funds was not balanced either. Its only when the tide goes out you can see who isn't wearing shorts. Its an inherently unstable model that, once the 5 year borrowing and on-call lending become unbalanced, can collapse. FC themselves refer to this as 'instability in their ecosystem' which they are reducing by effectively reducing their lending from fickle retail investors and selling securitisations of loans to subprime debt funds. It is true what you say about a sea change exposing weaknesses - but is it correct to suggest that FC's model was found wanting by changing market conditions? Is it not more the case that FC were the exposers of themselves, in that they radically changed their model to reduce costs of retail lenders and they reduced their lending criteria to swell their growth through the IPO? I might suggest that changes in market conditions might in part result from FC's poor performance (share price, defaults, liquidity) having a detrimental effect on confidence in p2p.
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tjtl
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Post by tjtl on Jan 23, 2020 9:09:25 GMT
Share price now at an all time low, 81.5 pence.
At this level the market capitalisation is less that £300m- and £300m is the amount of new money that the company raised at its IPO - so ignoring day-to-day trading losses the company is valued at a big fat 0.
Shareprice has fallen by 81% since IPO.
So whilst we can bemoan the financial return of lenders- it is a darned site better than that of shareholders.
Stockmarket looks like it is giving up on FC- I am sure I am not the only one that hopes a decently capitalised financial institution does some bottom fishing and acquires the business putting shareholders and us out of our misery (better to have a better credit covenant).
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Post by Ace on Jan 23, 2020 13:06:31 GMT
Spot on Deees , IMO. I just looked back at my notes on this platform from autumn last year that I keep for friends and family that are interested in P2P. It reads: "Don't touch. This Fishy Customer will riggle on the hook for quite some time due to its large cash balance, but when it comes to DD and loan management they don't have a Flipping Clue. This platform WILL fail." Just the opinion of a totally unqualified, yet deemed sophisticated, investor. Could be wrong, as I often am, but I'm clearly not the only one thinking this way.
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corto
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Post by corto on Jan 23, 2020 14:10:03 GMT
I can’t see any reason why any institution would want to touch FCH let alone acquire it. IMHO the share price is still too high as there’s no obvious viable path to profitability. Its original and still current strategy was flawed and there’s no hype camouflaging it now. It’s hard to see what a viable strategy might look like as - there’s little if any value add in the FC proposition - no core competencies to speak of - little if any brand value (none retail-facing and little if any institutional-facing and not much SME facing) - no genuine intellectual property - no IT that’s got any wide value. It’s got a chunk of cash on the balance sheet but that will be needed to absorb losses for the next five years or so. I am not so sure about this. They are one of the big players in the area; quite present publicly; loan origination is stable; they take tough measures to adapt to challenges; they could be one of the medium term survivors. That view could make them look cheap to some.
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Mucho P2P
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Post by Mucho P2P on Jan 23, 2020 14:40:27 GMT
I can’t see any reason why any institution would want to touch FCH let alone acquire it. IMHO the share price is still too high as there’s no obvious viable path to profitability. Its original and still current strategy was flawed and there’s no hype camouflaging it now. It’s hard to see what a viable strategy might look like as - there’s little if any value add in the FC proposition - no core competencies to speak of - little if any brand value (none retail-facing and little if any institutional-facing and not much SME facing) - no genuine intellectual property - no IT that’s got any wide value. It’s got a chunk of cash on the balance sheet but that will be needed to absorb losses for the next five years or so. I am not so sure about this. They are one of the big players in the area; quite present publicly; loan origination is stable; they take tough measures to adapt to challenges; they could be one of the medium term survivors. That view could make them look cheap to some. I will review an investment at sub 50p in the share price, until then, I am just watching and not catching a falling knife.
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corto
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Post by corto on Jan 23, 2020 15:44:01 GMT
I agree, but will not waste time with pondering now. There are many other options and I've too much in p2p already even though not shares.
Nobody can say anything about long-time at the moment as nobody can see through the climate crunch wall.
Not much confidence about medium term either with all the freaks in power.
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Stonk
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Post by Stonk on Jan 27, 2020 12:46:21 GMT
FCH nipped below 80p today, a new all-time low.
I don't know whether anyone cares any more. It seems an long drawn-out but irreversible inevitability that we will see lower and lower lows from now on.
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dorset
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Post by dorset on Jan 27, 2020 13:07:13 GMT
There has clearly been a support level at 80p in place for some weeks now.
Breaking through this to 78.1p is significant – has the support level now disappeared. If so to what?
Now down at 17.7% of IPO price.
Makes the small capital loss on my FC loans over the last year look like an investment masterstroke.
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Post by shanghaiscouse on Jan 27, 2020 15:04:46 GMT
to extend the glider analogy, the CEO already pulled the handle and set off the escape seat from the glider, he cleaned up at the time of the IPO and doesn't need to worry about the share price as his cash is in the bank. Probably also gliding in another sense, that his mind left the building long ago and his body occupies a seat, but that's it. Cash is in the bank, ker-ching, just time it right to get out altogether and make a big announcement about a new revolution in financial services, etc etc
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Jan 28, 2020 18:10:45 GMT
I thought it was worth a punt today and it was the fluctuation made a little £
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tjtl
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Post by tjtl on Feb 3, 2020 15:53:32 GMT
Dearie, dearie me..it is down to 75 pence today.
Thankfully, even under the most pessimistic of the analysts that cover the stocks projections, it shouldn't run out of money for a few years yet.
Unfortunately the rate at which my holding is being liquidated (through sale and repayment) means it will take a few years to get my cash out.
A rather unpleasant race.
Perhaps I am being hopelessly optimistic but I hope that in any unscheduled trading update, or in the annual result (due in March?) they can give some comfort as to cash burn. The stock market is almost giving up on them.
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ashtondav
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Post by ashtondav on Feb 3, 2020 18:41:06 GMT
Dearie, dearie me..it is down to 75 pence today. Thankfully, even under the most pessimistic of the analysts that cover the stocks projections, it shouldn't run out of money for a few years yet. Unfortunately the rate at which my holding is being liquidated (through sale and repayment) means it will take a few years to get my cash out. A rather unpleasant race. Perhaps I am being hopelessly optimistic but I hope that in any unscheduled trading update, or in the annual result (due in March?) they can give some comfort as to cash burn. The stock market is almost giving up on them. FC, even before the recent c0ck ups, is a difficult sell to the funds and institutions that are the major buyers:
1. It is an unproven business model - screened out automatically for many major investors.
2. It is not (now) in the FTSE250 - screened out automatically for many major investors.
3. It is not a "recovery" stock - screened out automatically for many major investors.
4. It is not a "growth" stock (since its warning) - screened out automatically for many major investors.
5. It is not, and is not nearly, profitable - screened out automatically for many major investors.
As a a result the shares suffer from a very "thin" market. If you look at the trading volumes they are very low - mainly small private investors buying or selling.
The best hope for the SP will be if the shares are re-rated as a "recovery" stock. Either that or a "value" stock (its market value is less than its cash!) And that will require good news in March.
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Post by Deleted on Feb 5, 2020 2:05:10 GMT
On 5th August 2019, I posted the following comment to this thread:
‘’Whilst the latest downward lurch in the share price is likely to be more about general market sentiment than FC specific, I did say earlier in the thread that I expected two key psychological FC price floors to be broken in due course. The first, £1, could be broken this week if there is no improvement in overall market sentiment. The second, 50p, I would expect to be breached within 12 months. There is an old market adage that it usually takes companies in a weakened state to issue three profits warnings before all the bad news is out in the public domain. Obviously every company is different but we will have to wait to see if this eventually applies to FC. I would not like to be their big Danish investor in the present circumstances.’’
Today, 5th February 2020, exactly six months on, with the share price marginally below 75p, I still stand by that posting of 5th 2019 August and the predictions for the FC share price. Although the share price seems to be quite volatile and may well bounce back from the current lows, the trend is down. Unless FC pulls something out of the hat at the next results release, the only way for the share price of a company that has a dubious business plan, consistently loses money, and is slowly burning through the IPO cash pile, is down. To state the obvious, if the Thought Leaders at FC cannot cut through their own hype and start to deliver a profitable business, then FC will go bust when they have burned through their IPO cash pile and cannot raise any new funds because nobody will throw good money after bad. And that does not take into account the increasing likelihood of a major global financial crash and the impact upon FC before they would otherwise burn through the IPO cash.
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