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

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.

NLR will be bouncing up tomorrow, I think...too many days of downward trend...369 today

Has everyone forgotten this one? Fundamentals seem good to me & I topped up at 305 and its bouncing just fine this week - worth keeping an eye on this as Party Gaming noise settles

Fantastic performance today !!!!

Going down as UBS-AG selling off its interest in NLR.

The Times October 02, 2006


Gambling online faces collapse in US after Senate ban
By Dominic Walsh



AMERICAs $6 billion (3.2 billion) internet gambling industry is facing meltdown after the US Senate pushed through a Bill at the weekend outlawing the processing of bets by banks and credit companies.
The surprise move, which is expected to spark a massive share sell-off, will prompt London-listed 888 Holdings to announce this morning that it is halting its entire US-facing operation, accounting for half its business.



PartyGaming, the worlds biggest internet gambling company, said last night that it was still evaluating the situation, although industry sources believe it will also announce a cessation of its services to American punters.

However Sportingbet, which was celebrating on Friday after a New York court released its former chairman, who had been facing gambling charges, will tell investors that it is still digesting the implications of the Bill.

Despite the Bills prescriptive nature, it excludes local online betting on horseracing, fantasy leagues and lotteries. It also has no impact on the hundreds of casinos and gambling emporia that dot America, ranging from the neon palaces of Las Vegas and Atlantic City to the riverboat casinos that ply their trade on the Mississippi.

One senior internet gambling executive said last night: This is the worst form of protectionism I have ever seen. This will drive internet gambling underground and consumer protection will go out of the window. The religious groups that lobbied for this may live to regret it.

The Unlawful Internet Gambling Enforcement Bill needs only to be signed by President Bush to become law. Legal sources predict that he will do so in the next two weeks, possibly as early as Wednesday.

The passing of the Bill in the early hours of Saturday surprised the industry. Although it had successfully negotiated Congress, its passage through the Senate looked likely to be blocked through lack of parliamentary time.

However, Bill Frist, the Republican leader in the Senate, got the measure through by attaching it to an unrelated Bill that enhances port security.

Gambling is a serious addiction that undermines the family, dashes dreams and frays the fabric of society, Dr Frist said. The bottom line is simple: internet gambling is illegal. Although we cant monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws.

The ban may drive some small companies out of business, although big operators such as 888 and PartyGaming will highlight the strong prospects of their non-US business.

However, 888 is expected to warn its shareholders in a Stock Exchange statement this morning that its withdrawal from America will force it to pare back its cost base, resulting in a significant hit against this years profits.

Views on NETeller please !!!!!!!!!!!!!!!!
Get in or get out, any comments welcome.............................

My worst performer this year by some margin - serves me right for breaking one of my golden rules and investing in a non dividend paying business. Bought at just over 7 and stopped out on most at 6.(Broke another rule by not selling the lot). According to RNS, as at end Sept has $200M free cash and by the time they stop accepting any US business that may be up to another $50M. No debt so unlikely to go bust and the intangibles in their balance sheet much less than in FPA before recent writedown. So what happens when they lose 70-75% of their business? All imo rests with quality of management and I currently am considering averaging down on present holding (thereby breaking another rule).May be better to wait for next results to see level of writeoffs and strategy going forward, but one to watch. Always DYOR etc.

Morgan Stanley has bailed out of NLR and UBS AG has reduced its stake from 4.04% to 3.68% today