ISU 5.08% 31.0¢ iselect limited.

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  1. 55 Posts.
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    I wonder at what point people who bought into iSelect in the hope of a quick profit from the much-hyped takeover will reassess due to the opportunity cost of hanging in there? Naturally it depends on the price at which you bought in and the amount you invested, but at zero return and potentially a loss, after a while even 3% in a bank looks a better investment.

    The signs don’t support a takeover, at least any time soon. iSelect has recently appointed a new advertising agency, extended the CEOs temporary status to permanent, received no offer from IHA and rejected the (unknown) others – none of which you’d expect to happen if a takeover was imminent.

    For those who really bought on the basis of an expected return to growth, the CEO’s estimate of "longer than 1 year, less than 5" for that highly optimistic result doesn't say much for its prospects – and remember, this is iSelect, so take with a bowl of salt anything the company says. Whatever Forager said about iSelect’s potential (supposedly the reason they bought in at the low price, rather than a takeover), I can't imagine them or any insto holding on just in the hope of it being realised.

    My guess: large shareholders will soon sell down, price will plummet, IHA (assuming they are interested) will be able to make an offer from a much lower base. Remaining holders will be glad to get out for what is the real value of the company, around $0.70. In the case of some big buyers who came in at average $0.60, that’s at least a profit. Beats the ongoing loss of missed opportunities as they tie up millions in iSelect. As a previous poster noted, the company is years away from being able to get to even $1.10 organically.

    At least the company didn’t offer any guidance for this year. Saves the trouble of downgrading it later.
 
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