NETeller - NLR - 3.15
Thought i would start a new thread following on from
hawick - new issue looks very special - not to steal the thunder from
hawick but just to highlight the company name to those not already in to this
potential blockbuster.
Those of us who are following NETeller know the background and have been
active with postings,for newcomers i strongly sugest viewing the
( new issue looks very special posting )the content will speak for itself.

Brief overview of NETeller
The company handles online cash transactions across the globe
on 21st oct gained fsa approval to operate as a regulated e-money issuer
and will passport the regulated status to all 25 EU member states
it has over 1 million clients rising by 2000 number each day
1500 online merchants and processed over $1.5 billion in 2003
pre tax profit is estimated to be 29 million to dec 04 rising to
40 million next year
per currently 20 to dec 04 falling to 11.5 which is low for sector
brokers have been raising forcasts on a regular basis
share price has risen over 50% since launch earlier this year
new markets emerging constantly,asia has the potential for supergrowth
online casinos are creating enormous profits
given all this - cash generative - huge market - fsa approval
infastructure in place to handle growth, profits accrue to bottom line
the market force is behind it with good relative strength
all put together it is hard to argue against this has the potential
to be a blockbuster over the year ahead

regards HUSTLER

looking at the volume he was in 3 days ago and my guess looking for 650

As far as I can remember EK started shorting these in early march 05. The price then was about 620. So it's got a long way to go before he breaks even and even further before profit. That doesn't mean it can't happen.

LOL
MS

EK started spreading rumours about a competitor to NLR some time last year (might have been in March).

When a few members of the ADVFN bulletin board investigated his claims it turned out they were complete rubbish, and the "competitor" - called www.ipayu.co.uk - was some kind of scam run by a single individual... ;-)

EK's current rumours are equally unfounded (but then that does seem to be his style!) He is claiming that 888 are going to switch away from Neteller, and suggesting that could cause a big drop in revenue. He is implying, of course, that Neteller are somehow reliant on 888. In reality, 888 already use 26 different payment methods, of which Neteller is just one. So an extra payment method will have a negligible impact.

andy , he is talking out of his bottom , what is more worrying is the number of bits of anti gambling legislation coming foreward in the US

IMO there's been a huge over reaction today! Results out very soon and we've been told they are good-this drop seems to have been triggered by one analyst note from Morgan Stanley saying there are concerns about tightening up on US gambling restrictions. As NLR operate from the isle of Man base they are not subject to US and they have many other strings anyway. maybe I'm missing something but I'm not going to lose sleep and will hope to add some.

Hi MP
If the forecasts are to be believed
the results due shortly should be very good
indeed. Price acting like a yo yo dosen't do
the nerves much good but true value
will show in the sp in time, if all is believed
this is now very cheap.
All the best
HUSTLER

Holding my nerve in this one and picked up another 1000 while they are down. Institutions have been buying so I hope the sp will bounce back on great results on the 31st !

The bounce back has started, 2 institutions have bought in now I'm hoping for the expected great results on the 31st!

Still in at 710p and happy to hold for longer term. Makes a lot of sense for them to tie up with a major bank at some stage.Concern over possible US legislation against internet gaming has held price back (and could do more damage in short term if it proves well founded) but their dependence on US is gradually reducing - still I believe well over half, hence uncertainties-and long term looks strong. Excellent profit/cash generation record. Dividend with results would be a bonus. IMO a buy for the brave short term, but a long term winner - as always DYOR

Hi All
The gaming sector has been hit overall with the legal
thing in the states spooking investors,
however the concensus of the situation seem to be
it is only a few do gooders trying to rally support and there are
several legal hurdles to overcome before lawfull action can take
place the feeling seems to be the action will fail at the first hurdle
as certain questions are being asked. Such as if online poker sites are
illegal what about state owned lotteries same thing isn't it.
Can you see the government scrapping them i don't think so,
if they do they are admiting quilt to illegal activities themselves
something we all know they would never do.
Furthermore i undestand advisors have a target price on Neteller
of 9.25 and house broker has target 11.25
personally i think these are both to low, but i am a bit biased
as i am holding for the long term unless the story changes.
good luck all
HUSTLER

DYOR

outstanding results and the price falls-no understanding the market!!

Anybody know whats happening here? up 7 %!!!!!

More please

B2B

maybe the new tax year-people took profits which drove the sp down and now backing back in. I notice the institutions picked up some large chunks while the price was down so glad I kept my nerve. onward and upwards!!

The anti-gambling lobby in America had very poor support for their proposed legislation yesterday.
The whole internet gambling sector is up today - the rise is not NLR specific but a welcome change to the recent norm !!!
Scouring through the lists of winners it looks as though FPA (FireOne) and LAD (Ladbrokes) might have a bit of catching up to do but, as laways, DYOR.

;o)

still ticking away
gaming sector has been out of favour for a while
now times are a changing
as lanayel says no support for the bill,
load up time yet again
all the best, dyor
boom boom

Everybody out now? :)

IMO Neteller's current share price relies on poker and gaming - that is the start and the end of it. They also are benefitting from a lack of competition caused by the US threats to the big card companies, and Paypal voluntarily withdrew from the market for that reason too. Neteller have been lucky but will it last long term?

Keep your eye on the poker press if you are in Neteller. Here's a good starter source. Also a good one to bookmark if you are UK based and play a bit of poker:

http://uk.pokernews.com/news/2006/5/neteller-first-quarter-agm.htm

http://uk.pokernews.com/

An Interactive Investor interview with Neteller CEO Ron Martin.

The direct approach
09.05.06 Peter Temple

"My mother used to say that I was pretty direct, that I didn't avoid conflict. It's a pretty good skill for business," says Ron Martin, Canadian born ceo of Neteller. Neteller operates a large secure online payments system primarily focused around the online gaming community. It is one of the top half dozen companies on AIM by market value.

Mr Martin came to Neteller last year by a roundabout route. His business career began during his time at McMaster University in Toronto when in college holidays he got involved working for College Pro Painters, a franchise business that was part of First Service Corporation. This led to a greater involvement in the parent company and from there to more senior management roles.

Martin ended up working for the business in Canada from 1986 to 1993, then moving to Chicago to take responsibility for the company's North American operations, before returning to Boston in 1997. "But by then I felt I learned all I was going to learn at the business", he says, explaining his decision to leave and take a year out. "I wanted to make sure exactly what it was I wanted to do."

So began an involvement with an online customer relationship management software business and subsequently a potential start-up that failed to raise funding. The plus factor for Martin from the internet bubble was that he spent four or five years learning about software.

Martin was in the early stages of a new job at Globoforce in Ireland when Steve Lawrence, Neteller's founder, got in touch. Martin had known Lawrence at First Service, in fact replacing him as head of the firm's US operations in Chicago. As he started to look in detail at Neteller, he got more intrigued. "They really needed someone to understand the IT aspect of the business and scale it up. It was this that had become the constraint on expansion," remarks Martin.

Along the way there has been a cultural adjustment to make. Martin contrasts the differences between US and European business cultures: "In the US it's very numbers driven. In London people do try to understand the subtler aspects of the business."

One of the main concerns with Neteller remains its dependence on internet gambling for the bulk of its revenue stream. It's highly profitable, but potentially volatile. Martin believes that the company's experience in servicing the gaming business holds it in good stead for extending the company's model to other online businesses. "We have succeeded in an environment where payment is inherently risky. So we have the ability to provide risk mitigation and to offer merchants cleared funds. If you can do this in the gaming world, you can succeed anywhere."

One plan is to make a move into financial services perhaps via a joint venture with a bank. Banking, investment and insurance are all seen as areas where the group's expertise can be applied. "It's a conceptual opportunity," says Martin, "but it would be lower-margin than what we do now."

Martin says the company is basing future expansion on a so-called 'deepen and extend' strategy, adding value to the services it offers the markets it already operates in, and then finding new markets to explore. Examples of the ways in which it can do this is to offer payment services in a wide range of languages and to go into areas where payment is more problematic. "It's difficult to pull off, but we believe our margins are only sustainable if we do things like this. Above all we have to understand our customer base and what they want from us."

One issue that overhangs the company remains that of the legal status of internet gambling in the US. US lawmakers appear to be veering between the idea of an outright ban (surely impractical in the internet era) and regulation. Martin believes that regulation is the most likely eventual outcome but observes that "the present grey area is perfect for us. If it becomes a regulated activity, others might move back in. We have something of a love-hate relationship with the US over this. But there is no doubt that US law enforcement agencies, for example, see us as the good guys."

Recent results at Neteller show revenue up 108% for the 2005 year, while pre-tax profit was up 114%. The company issued an upbeat statement with the results, and analysts have taken this as their cue to forecast earnings per share growth 51% to a consensus estimate of 66.1p a share for 2006, rising to close to 90p a share for 2007. This puts the shares on a current year multiple in the low teens, falling to less than 10 times for 2007.

I think another big factor is that NLR will eventually move into banking, credit cards etc as well as scaling up in Asia. It already has a huge number of customers - it must look to develop the potential.

rgrds
gk

I think this one is being unfairly hammered-wish I had some spare cash!!

Fall looking very overdone , one for the watch list for the bounce.