Betfair set float price

[Euler]

Rant by Frog on the Betfair forum

The results are in for the first quarter after the sportsbook took the exchange off the Betfair front page.

Q1 FY14 Revenue £4.0m
Q1 FY13 Revenue £3.4m

So revenue is up £600,000 for May, June and July on the previous year.

To achieve this Betfair have thrown everything at the sportsbook

1. Management have been focused on it to the point where the CEO hasn't even looked at the affect of the Premium Charge on the exchange.

2. £5m was spent on April on getting 130,000 customers by buying bluesquare.

3. Customers are taken to the sportsbook confusing the them - a friend of mine stopped using the exchange because he cannot find the lay button anymore (coz he was on the sportsbook).

4. The brand is being destroyed. Betfair used to stand for:

sharp betting
flexibility
liquidity
value
winners welcome

now I cannot think of a single unique positive way to describe it. The brand is being trashed in the obession to be like everyone else. What does the brand stand for now?

Looking at games they have gone from £19.8m to £13.7m. A massive decline with no Euro 2012 excuse. Another distraction away from the core business of the exchange.

.......

If we look at the exchange:
Q1 FY14 Revenue £60.0m
Q1 FY13 Revenue £68.9m

The revenue is down. The statement says that when international loses and Euro 2012 are taken into account the growth is a healthy 4%. This claim of 4% shows that even after:

1. Sending all new customers to the sportsbook
2. Confusing current customers with the new homepage
3. Having a clunky unorganised slow website
4. Leaving the Premium Charge in place
5. Making little or no commission adjustments to make football betting more competitive
6. Scraping any effort to educate customers about the exchange
7. Focusing advertising on the sportsbook

The exchange is growing and is by far the dominant part of the business.

1. Even after all the focus on the sportsbook and games and other rubbish over the last few years the percentage of core revenue has grown in the last year.

The exchange represents 76.1% of core revenue compared to 74.4% this time last year.

2. Overseas markets revenue on the exchange, particularly, has not fallen as much as expected. This shows that the product is more robust than sportsbook and games and need less advertising.

.......

Its hard to find a case for the continued attempts at diversifing by Betfair management. They have tried poker, social gambling, games, casino, lmax in the past.

They all confuse the person to person brand and have ended up taking up management time and have added very little to company.

Is the second tier sportsbook that they aspire to make Betfair really worth all the effort?

Breon Corcoran is probably the best gambling executive in Europe and you hear him say 'there are only so many hours in the day'. Almost 80% of his revenue comes from the exchange. Why is he focusing on the other 20%? Why is he so keen to develop a second tier sportsbook? Why sink so much time and effort into it rather than the exchange? He may not want to pay homage to the exchange but it is the exchange that creates the revenue.

Take away the exchange and you have nothing.

Take away the sportsbook, the games, the poker, the casino, the social gambling (already gone), lmax (already gone) and focus on the exchange and you will have a great product that sells itself via satisfied customers.

[Golfer]

Well said that man!

[andyfuller]

The upwards march is carrying on a pace. Can't figure out the driving force behind the rises bar Citigroup and Morgan Stanley raising thier target prices to 1150p and 1050p from 975p and 1000p respectively.

20130910_Betfair_Daily.png

[Euler]

I'm not sure Betfair are sure why it is advancing at such a rate either TBH. Cost cutting will debase costs from previous years and a year on that should allow them to report a big boost in earnings, but without growing the underlying business that will drop out of the equation again eventually.

[Euler]

Bert sold more shares yesterday so he has sold over 60% of his holding in less than two years.

http://www.betangel.com/blog_wp/2013/09 ... ir-shares/

[andyfuller]

Another strong day for BET up nearly 3% on the day and broke through the ~1,075 level easily closing above it.

Up a little over 50% since the day before the potential takeover was first announced and almost 60% YTD.

[Euler]

Momentum traders are no doubt on board now, showing up in several momentum screens.

[Euler]

One of the original investors in Betfair has sold their entire stake: -

http://www.betangel.com/blog_wp/2013/09 ... _cash_out/

[andyfuller]

An interesting move. It would be interesting to look at the register now and see who has what. Is there anywhere online that this can be done?

These sales by the original shareholders will be helping with the liquidity of shares from memory there weren't a huge amount on the open market.

[Euler]

Richard Koch just sold another 1m shares

http://www.investegate.co.uk/betfair-gr ... LC%20Alert

[PeterLe]

Richard Koch just sold another 1m shares

http://www.investegate.co.uk/betfair-gr ... LC%20Alert

That's a sizeable proportion of his total.
It doesn't exactly instil confidence does it?

[Euler]

I've sold all mine given the run up in price, just debating whether to short it.

[PeterLe]

I've sold all mine given the run up in price, just debating whether to short it.

Well if you did that are was correct, ie betfair started to go down hill, that will bring mixed emotions!

Speaking of mixed emotions:-

A husband and wife were sitting watching a TV program about psychology explaining the phenomenon of "mixed emotions". The husband turned to his wife and said, "That is a bunch of crap. I bet you can't tell me anything that will make me happy and sad at the same time.

She said: "Out of all your friends, you have the biggest Cock".

[Will Sharpe]

Falling off my chair

[andyfuller]

Ed Wray was on this week's Radio 5's On The Money:

http://www.bbc.co.uk/iplayer/episode/b0 ... 3_10_2013/

Declan Curry looks at the stories behind the business headlines. He is joined by co-founder of Betfair and Director of Funding Circle, Ed Wray; Dale Murray, technology entrepreneur turned angel investor and Lucy Armstrong, former chair of the CBI's Small Business Forum.