I guess just because they overpaid their advisers or undervalued...

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17/03/19

14:20

Post #: 37789028
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Originally posted by upside_down: ↑

Point to me where these same things were said? The thing that stands out the most to me is the number of options given to the IPO adviser and brokers. 15 million. I can't see anywhere in Afterpay's prospectus where this was done. This causes an incentive for brokers to persuade their clients to buy this stock so they can get options from Armada Capital. Each option carries an exercise price of 30c. The 15 million options Armada has received are now worth $20 million.

Afterpay paid $1.7 million cash to Bell Potter and Wilsons for the IPO, i.e. 6.8% of the capital raised, and no options. Splitit paid $1.0 million cash, 6.8% of the capital raised, on top of 15 million options.

Afterpay costs of offer:

https://www.asx.com.au/asxpdf/20160503/pdf/436zmt8bjdwvkf.pdf

Splitit costs of offer, same as Afterpay, without included the 15 million options given to Armada.

15 million options to Armada capital, exercisable at 150% of the price of the cap raise i.e. 30c.

https://www.asx.com.au/asxpdf/20190125/pdf/4422k2qq3pf109.pdf

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I guess just because they overpaid their advisers or undervalued their company doesn't mean it won't be worth a billion or more if they execute their strategy.

I agree with what has been said above, I know a few funds who said Afterpay wasn't worth $2 and I know one that passed up a seed investment at 25c.

Like many of us they thought it was overvalued. And held on to that feeling at $5, $10, $15, etc.

They might be right! That's the hardest part, as I alluded to in another post. What if our benchmark (APT) falls to $10. Then what do we 'value' SPT at?

SPT Price at posting: $1.60 Sentiment: Hold Disclosure: Held
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I guess just because they overpaid their advisers or undervalued...

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