Interesting one this one. Had a good look over the prospectus at 40,000ft and happy to be shown wrong but my gut thinks this IPO will MOB'it.
The user case 'I buy something and they pre-auth my Credit Card for that amount. Once I leave the store with my item, or my item ships, they charge the first of (normally) 12 installments to my Card and re Pre-Auth my card for the remaining cost of my purchase. Then do the same thing 11 times over the next 11months'
A few points of interest to me and maybe others,
1, Are they still offering the ability to buy things $400 or less through 3 installments via a Debit Card. If not, why not.
2, How many of the 15.9m shares obtained by Simpel at 13c will be available for sale on day one. Same for the 25.7m shares issued at 11c. Nice to see funds used to buyout stale existing holders though.
3, The business model extends the time it takes for Visa and MasterCard to get paid. What happens if this upsets them and they somehow disallow it through their platforms. This is a major concern of mine.
4, A very strong team of Directors, but until those with none buy some shares I'm not convinced they care.
5, This will burn through its raised cash in quick time. As an investor I'd be waiting for raise number two, what price it is and how much.
6, They have shown the graphs of Merchant growth, I would like to see one of Merchant departures.
7, They average 12.4 users in each country, which I think is pretty average. It's a similar number to a statistic used once by GetSwift.
8, Will it be too expensive for small Merchants. On a plan where a Merchant is paid in installments over 12 mths, a $120 sale would be $19.80 in fees(BAD), $1000 would be $33(OK). My math wrong?
9, I'd like to know the fees for the other two options the Merchants have for receiving their funds.
10, Point 8 makes me want to see Point 6.
11, It's Armada as lead manager. Not a fan.
12, Why is Miranda Kerr's hubby in this. Intriguing.
13, The number one shareholding of 58m shares is owned by an entity connected to a quitting director. Do they want out.
14, The targets of the performance rights are outstanding. BIG targets. If they get met, this thing will fly......EDIT. looked deeper and realised $150m in transactions is around $2.7m (gross) to Splitit at the 1.8% they seem to average. It's really what they should have now to justify the $42m odd EV they have.
15, No late fees as the automated payment schedule and hold on card should not allow it, but no interest! Is this a clever workaround? What happens if the charge to the person's CC is not paid by the due date? Is this just 'No interest charged by Splitit but you may incur interest from your card provider'
16, Has the company already addressed this possibility in the prospectus. The only way to be unable to re pre-authorise already pre-authorised amounts would be if the CC had attracted an interest charge right? Or I guess if it's maxed out and they charge the installment before the new pre-auth.
19, They list all the reasons that shopping carts are abandoned, their main selling point to merchants. They actually shoot themselves in the foot on this. 85% of carts are abandoned due to lengthy checkout times. If they can already check out with their credit card, is that extra step to check out with Splitit what pisses of 85% of us.
20, $100 Amazon gift cards to people who have complained online! Hmmmm.
21, "Today, over 800 merchants have registered for Splitit" RewardExpert June 2018 interview with Gil Don.
22, "over 1,000 merchants are selling their produce on his website and over 100,000 consumers are making purchases through Splitit" Forbes October 2018. Why is the highest figure quoted for merchants in the prospectus 310. Saving it for the staggers pump?
23, I assume on top of the fees mentioned by Splitit are the transaction fees charged by Visa/MasterCard. If these include a % PLUS a 10c (or so) fee PER transaction it is a worry.
It's just my thoughts, like them or hate them. I'll be watching this closely, and as mentioned, possibly be interested in raise 2.
If you are so inclined to deem me a downramping clueless loser then I'm up for the fun but would much prefer an emotionless discussion about where my points are incorrect or irrelevent.
Cheers and gltah, we need a good stagger. Market feels ready to get excited again too. Perfect timing to list.
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