General Betting
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So the Betfair figures in today's Racing Post confirm what pre race and in running horse racing punters have suspected for some time but had little hard evidence to be sure of; UK horse racing matched turnover IS in relatively sharp decline, although overall turnover levels including other sports are still healthy and growing.
Where do punters think this will leave UK horse racing markets in five years time? Will enough foreign mugs be found to keep the gravy train on the tracks or is this something more terminal for uk racing markets, while Betfair grows from strength to strength in other areas?
Some might suggest that this is less a problem for Betfair than for pro punters; I guess the exchange would be relatively relaxed about mug punters drifiting away from racing to other avenues casino, poker, exchange games, arcade where Betfair gets to hold a far bigger percentage of the mug customer's "drop" or losses...
Would a post-float Betfair actually likely to gently encourage continued sharp decline in horse racing turnover? Less hassles from the levy, complaints about IR fairness, fees to pay to picture providers etc...
Betfair has created a much bigger pool of full time punters than ever existed before betting exchanges; will most of them be joining council workers on the ever growing dole queue in a few years time? Will the exchange part of the BF products dwindle to being of only relatively marginal significance, except continuing to exist as a sexy "cool" marketing tool to distinguish the Betfair casino from rival operators that helps attract fresh mug meat?
If one owned Betfair after a float, wouldn't it actually be a profit maximising sensible strategy to do the following:
a) use the unique aspects of betting exchanges as a marketing tool, a bit like free bets, to get virgin mug punters to open accounts with the exchange instead of the opposition. Exploit concepts such as Betfair customers "cut out the middle mad" and Betfair customers are "shrewder than normal punters" to get new accounts open.
b)However, at the same time deliberately run down and marginalise the exchange as far as possible within the Betfair site to reduce levy feest etc. Discourage recreational players from using it as far as possible once they have signed up and joined. Instead steer them towards the casino and exchange games where they will lose their the money to you, the "house", instead of pro punting sharks.
c) Take a leaf out of Denis Healey's book and 'squeeze the rich' - winning BF punters - until the pip's squeak. Keep hiking the premium charge every six months until the point where revenue actually starts to decline. When the band of self-interested customers start to wince, ignore their bleats.
d) Generally discourage professional/corporate betting activity and generally try to move closer to the higher margin recreational mug-only set up of highly profitable firms like Bwin, Bet365 and Paddy Power?
e) Allow in running and the sports exchange to continue functioning at a low level, just above the point where the product is non-viable or gives competitors a chance of taking over.
Where do punters think this will leave UK horse racing markets in five years time? Will enough foreign mugs be found to keep the gravy train on the tracks or is this something more terminal for uk racing markets, while Betfair grows from strength to strength in other areas?
Some might suggest that this is less a problem for Betfair than for pro punters; I guess the exchange would be relatively relaxed about mug punters drifiting away from racing to other avenues casino, poker, exchange games, arcade where Betfair gets to hold a far bigger percentage of the mug customer's "drop" or losses...
Would a post-float Betfair actually likely to gently encourage continued sharp decline in horse racing turnover? Less hassles from the levy, complaints about IR fairness, fees to pay to picture providers etc...
Betfair has created a much bigger pool of full time punters than ever existed before betting exchanges; will most of them be joining council workers on the ever growing dole queue in a few years time? Will the exchange part of the BF products dwindle to being of only relatively marginal significance, except continuing to exist as a sexy "cool" marketing tool to distinguish the Betfair casino from rival operators that helps attract fresh mug meat?
If one owned Betfair after a float, wouldn't it actually be a profit maximising sensible strategy to do the following:
a) use the unique aspects of betting exchanges as a marketing tool, a bit like free bets, to get virgin mug punters to open accounts with the exchange instead of the opposition. Exploit concepts such as Betfair customers "cut out the middle mad" and Betfair customers are "shrewder than normal punters" to get new accounts open.
b)However, at the same time deliberately run down and marginalise the exchange as far as possible within the Betfair site to reduce levy feest etc. Discourage recreational players from using it as far as possible once they have signed up and joined. Instead steer them towards the casino and exchange games where they will lose their the money to you, the "house", instead of pro punting sharks.
c) Take a leaf out of Denis Healey's book and 'squeeze the rich' - winning BF punters - until the pip's squeak. Keep hiking the premium charge every six months until the point where revenue actually starts to decline. When the band of self-interested customers start to wince, ignore their bleats.
d) Generally discourage professional/corporate betting activity and generally try to move closer to the higher margin recreational mug-only set up of highly profitable firms like Bwin, Bet365 and Paddy Power?
e) Allow in running and the sports exchange to continue functioning at a low level, just above the point where the product is non-viable or gives competitors a chance of taking over.
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Falling matched turnover doesn't necessarily equate to falling liquidity either.
True. And it was a very small sample of 2 majors meetings only anyway.
In my opinion, howisurluck is right. The golden age is over. We are left with 3 choices:
1 Go to the other exchange. (or bookies)
2 Get a job
3 Go to the casino, poker rooms etc. (They advertise these all the time, so they would prefer it if we went there.)
1 Go to the other exchange. (or bookies)
2 Get a job
3 Go to the casino, poker rooms etc. (They advertise these all the time, so they would prefer it if we went there.)
Howisurluck may be right or wrong.
But what an excellent post irregardless.
Scary to read if you using BF as some form of prime or even secondary serious income source.
Much food for thought.
Would be interested to know if this type of post is pointed out to the senior echelon of the BF mgt.
But what an excellent post irregardless.
Scary to read if you using BF as some form of prime or even secondary serious income source.
Much food for thought.
Would be interested to know if this type of post is pointed out to the senior echelon of the BF mgt.
Bf's yearly profits were £15 million and Bet365's around £90 million.
If I were a bf shareholder, I might be asking, 'why aren't we more like Bet365?'
If I were a bf shareholder, I might be asking, 'why aren't we more like Bet365?'
Are other exchanges feeling thesame decrease or have they gained custmomers?
Will the exchange part of the BF products dwindle to being of only relatively marginal significance,
Betfair has released sector figures in it's pre flotation pack. I believe the exchange was a bigger grower than either poker or xchange games despit being the most established sector.
Where do punters think this will leave UK horse racing markets in five years time? Will enough foreign mugs be found to keep the gravy train on the tracks or is this something more terminal for uk racing
Why would foreign punters want to bet on UK horse racing? It would be football and other sports.
a) use the unique aspects of betting exchanges as a marketing tool, a bit like free bets, to get virgin mug punters to open accounts with the exchange instead of the opposition. Exploit concepts such as Betfair customers "cut out the middle mad" and Betfair customers are "shrewder than normal punters" to get new accounts open.
They are doing similar already
b)However, at the same time deliberately run down and marginalise the exchange as far as possible within the Betfair site to reduce levy feest etc. Discourage recreational players from using it as far as possible once they have signed up and joined. Instead steer them towards the casino and exchange games where they will lose their the money to you, the "house", instead of pro punting sharks.
they are not going to discourage punters using the exchange. Such an idea is ridulous as is point e.
d) Generally discourage professional/corporate betting activity and generally try to move closer to the higher margin recreational mug-only set up of highly profitable firms like Bwin, Bet365 and Paddy Power?
An A rated firm wants to be more like a B / B- or C- rated firm
Betfair has released sector figures in it's pre flotation pack. I believe the exchange was a bigger grower than either poker or xchange games despit being the most established sector.
Where do punters think this will leave UK horse racing markets in five years time? Will enough foreign mugs be found to keep the gravy train on the tracks or is this something more terminal for uk racing
Why would foreign punters want to bet on UK horse racing? It would be football and other sports.
a) use the unique aspects of betting exchanges as a marketing tool, a bit like free bets, to get virgin mug punters to open accounts with the exchange instead of the opposition. Exploit concepts such as Betfair customers "cut out the middle mad" and Betfair customers are "shrewder than normal punters" to get new accounts open.
They are doing similar already
b)However, at the same time deliberately run down and marginalise the exchange as far as possible within the Betfair site to reduce levy feest etc. Discourage recreational players from using it as far as possible once they have signed up and joined. Instead steer them towards the casino and exchange games where they will lose their the money to you, the "house", instead of pro punting sharks.
they are not going to discourage punters using the exchange. Such an idea is ridulous as is point e.
d) Generally discourage professional/corporate betting activity and generally try to move closer to the higher margin recreational mug-only set up of highly profitable firms like Bwin, Bet365 and Paddy Power?
An A rated firm wants to be more like a B / B- or C- rated firm
Nice post in response Clydebank.
But why spoil it by being so agressive in certain parts.
The OP was only an expression of view, not of fact.
But why spoil it by being so agressive in certain parts.
The OP was only an expression of view, not of fact.
^ foreign punters would want to bet on UK races because it has the best liquidity of them all. Australia is second but the German, French, New Zealand, Singapore, South African & American races have generally poor liquidity and in running is next to useless in the couple that offer that feature.
Even in Australia, we don't have in-running in the place markets.
Even in Australia, we don't have in-running in the place markets.
Clyde is right no normal foreign punter will ever touch such a joke called horses. Only exception can be matched betting to get some free money from signing up bonuses that's all. None cares about horses out of UK.
I think betting on horse racing is suffering as much as anything because of the availability and increased acceptance of gambling on other sports. It's never going to get back to what it was 5/10/20 years ago.
When I was young it was kind of accepted that if you wanted a bet (in a betting shop) that meant gambling on the horses. Football was minimum 3 aways or 5 homes and in any case was mainly associated with the pools. Things have completely changed. Young people are interested in football, not horse racing, and now that horse racing has lost it's almost exclusive gambling association with the GBP it will never get back to what it was.
When I was young it was kind of accepted that if you wanted a bet (in a betting shop) that meant gambling on the horses. Football was minimum 3 aways or 5 homes and in any case was mainly associated with the pools. Things have completely changed. Young people are interested in football, not horse racing, and now that horse racing has lost it's almost exclusive gambling association with the GBP it will never get back to what it was.
.Marksman.,
Horse race punters still have the option of betting on course.
Horse race punters still have the option of betting on course.
Horses for courses eh Muqbil ?
But what do others apart from Clyde think about the other parts of the OP?
For example do you think sports betting will perhaps start to lose some of its appeal as it becomes harder and harder to turn a profit, that is without cheating in some manner ?.
Or do people want, oe need, to bet on anything anytime anyway ?
But what do others apart from Clyde think about the other parts of the OP?
For example do you think sports betting will perhaps start to lose some of its appeal as it becomes harder and harder to turn a profit, that is without cheating in some manner ?.
Or do people want, oe need, to bet on anything anytime anyway ?
How about you post your own opinions for once FAFH?
Personally agree with nearly everything CB said. I also disagree with your point about it being serious food for thought for pro gamblers. Pro gambling is always evolving, there was no such thing as exchange betting when I started it, and there will likely be no such thing as exchange betting when/if I finish it.
If there were no pro punters on Betfair, there would be no Betfair in the same way that if there were no successful card counters, there would be no (or little) blackjack.
Personally agree with nearly everything CB said. I also disagree with your point about it being serious food for thought for pro gamblers. Pro gambling is always evolving, there was no such thing as exchange betting when I started it, and there will likely be no such thing as exchange betting when/if I finish it.
If there were no pro punters on Betfair, there would be no Betfair in the same way that if there were no successful card counters, there would be no (or little) blackjack.
Me being accused of NOT posting my own opinions ?
Now that's a twist on events I certainly didn't expect.
Btw I don't think the OP was suggesting that BF was going to disappear.
Just morph into something not intinsically useful or attractive to real sports gamblers.
Also, reading your last sentence over and over again Lori, I'm not sure you actually said what you meant to say. Did you ?
Why wouldn't ther be BJ if there were no successful card counters ?
Now that's a twist on events I certainly didn't expect.
Btw I don't think the OP was suggesting that BF was going to disappear.
Just morph into something not intinsically useful or attractive to real sports gamblers.
Also, reading your last sentence over and over again Lori, I'm not sure you actually said what you meant to say. Did you ?
Why wouldn't ther be BJ if there were no successful card counters ?
Why would there be?
No doubt it would have some action, but the existence of card counters and the release of Thorp's book was massive for the game.
No doubt it would have some action, but the existence of card counters and the release of Thorp's book was massive for the game.
Lori - no probs. Glad you liked it.
Erm........ good morning ? Are you on the other side of the world?
Erm........ good morning ? Are you on the other side of the world?
So what do you think of the OP yourself?
Personally I don't think it matters much where Betfair ends up. There will always be places to gamble (unless government legislation decides otherwise of course) and there will always be gamblers
The wheres and hows change continually, but the game goes ever on.
Personally I don't think it matters much where Betfair ends up. There will always be places to gamble (unless government legislation decides otherwise of course) and there will always be gamblers
The wheres and hows change continually, but the game goes ever on.
It's always good morning alun, gives me a 50% strike rate without having to work out what's going on outside.
Lori
I agree that there will always be gambling somewhere in some form.
One of life's real truisms.
But I sincerely hope that BF does not change any more in the direction outlined in the OP.
I think it's a horrible potential scenario and I would hope that the BF mgt. reads such a post and takes it all on board.
I agree that there will always be gambling somewhere in some form.
One of life's real truisms.
But I sincerely hope that BF does not change any more in the direction outlined in the OP.
I think it's a horrible potential scenario and I would hope that the BF mgt. reads such a post and takes it all on board.
Ive read the original post a few times now and dont understand where he is coming from tbh. Just more relentless doom and gloom. I only know about IR but there's no problem with liquity in that area unless you are staking 4 or 5 figures at a time (in which case it may be im not sure). A few whingers not winning what they were doesnt equal the end of in running. It just means the "mugs" wised up a bit.
Regarding pre-race liquidity the old age issues highlighted on here many times before have never been sorted... but dont the bookmakers complain that their game is now dead because all the money goes through Betfair?
Imo, that doesnt add up. No liquidity/All the money goes through BF now. Which one is it?
Regarding pre-race liquidity the old age issues highlighted on here many times before have never been sorted... but dont the bookmakers complain that their game is now dead because all the money goes through Betfair?
Imo, that doesnt add up. No liquidity/All the money goes through BF now. Which one is it?
Maybe CW will lend u his "The End Is Nigh" board and you can parade up and down the Archway Rd, howisurluck.
I note on entering BF website today, that it states some punter won 300,000 pounds on some casino slot game.
That's going to entice a few more people to over there no doubt.
That's going to entice a few more people to over there no doubt.
IMO horse race betting is in terminal decline. It's expensive to operate, doesn't have the sports fan following of soccer, tennis, etc, and is crooked to an unknown degree. Most people would probably consider me a pro gambler and I never touch horses, except when BF sends me a promotion that tips the playing field substantially in my direction.
Exchange betting is around to stay. People may mock the BK UK ads, but they are very reflective of how I believe BF sees things. When I moved in internet start up circles, the hot word was disintermediation. And is this case what is being disintermediated is bookmakers. Nothing will stop that trend.
BF's core business is exchange betting and it currently enjoys a defacto monopoly in that area. In all other areas of gambling BF faces significant competition. FYI most diversification, by most companies are failures. In fact it is quite common for companies to fatally harm their core business thru neglect while diversifying.
Using exchange games, etc to 'milk' punters attracted to the exchange is a poor business strategy IMO. Smart businesses look to maximize profitability from customers over 20+ years. IMO BF is suffering from a common failing of successful companies, IPOitus. I doubt the condition is terminal, but you never know.
Exchange betting is around to stay. People may mock the BK UK ads, but they are very reflective of how I believe BF sees things. When I moved in internet start up circles, the hot word was disintermediation. And is this case what is being disintermediated is bookmakers. Nothing will stop that trend.
BF's core business is exchange betting and it currently enjoys a defacto monopoly in that area. In all other areas of gambling BF faces significant competition. FYI most diversification, by most companies are failures. In fact it is quite common for companies to fatally harm their core business thru neglect while diversifying.
Using exchange games, etc to 'milk' punters attracted to the exchange is a poor business strategy IMO. Smart businesses look to maximize profitability from customers over 20+ years. IMO BF is suffering from a common failing of successful companies, IPOitus. I doubt the condition is terminal, but you never know.
Isn't BF just using its platform, established at great cost, to the maximum extent.
The only customers being " milked" are the ones who presumably are completely unaware of the real pros and cons of true gambling.
As such they will never last in the sense of the true pro, or good amateur, sports bet punters.
Might as well maximize what you can get from these " mugs" while you have them around, which is usually quite a short time.
I don't see this as an example of BF neglecting other parts of its site.
The only customers being " milked" are the ones who presumably are completely unaware of the real pros and cons of true gambling.
As such they will never last in the sense of the true pro, or good amateur, sports bet punters.
Might as well maximize what you can get from these " mugs" while you have them around, which is usually quite a short time.
I don't see this as an example of BF neglecting other parts of its site.
Also, I presume you can provide supporting facts for the rather extraordinary statement " FYI most divesification, by most companies are failures."
Just indulging in a bit of hyperbole perhaps to make your points ?
I sure hope so.
Just indulging in a bit of hyperbole perhaps to make your points ?
I sure hope so.
Muqbil,
I hadn't thought of that one. Come to think of it, I can't remember when I last went to a racecourse. Certainly not since Betfair came into existence. Point to Points could be a nice niche. A bookie once told me that the going was the key to it because information on it was hard to find. He used to walk the course before each point to point meeting and make notes for future reference. And it would get me out of the house. Fresh air would do me good. And it will be fresh in February!
I hadn't thought of that one. Come to think of it, I can't remember when I last went to a racecourse. Certainly not since Betfair came into existence. Point to Points could be a nice niche. A bookie once told me that the going was the key to it because information on it was hard to find. He used to walk the course before each point to point meeting and make notes for future reference. And it would get me out of the house. Fresh air would do me good. And it will be fresh in February!
I was a bit surprised the racing post article didnt mention the big mugs being creamed off to a private place.
far more interesting story for me than some of the tedium that was in there.
far more interesting story for me than some of the tedium that was in there.
It's accepted wisdom in stock investing circles, with analyses to back it up.
The reasons are the stock market values growth very highly, and management over-reach by thinking they can replicate their success in their core market in other markets when their initial success is mostly due to factors beyond their management control.
BTW FaFH, the 'established at great cost' is something of a misconception. One of the problems with the internet is it makes replicating your technology fairly easy. I have a pretty shrewd idea how much it would cost to replicate BF's platform, not least because I used to do that kind of thing for a living. You are looking at perhaps 20% of what it cost BF.
The other point I would make is that what sets BF's core business customers apart from all other internet businesses is their extreme price sensitivity. Succesful gamblers are by definition extremely price sensitive.
You'd be right in thinking I won't be buying BF shares anytime soon.
The reasons are the stock market values growth very highly, and management over-reach by thinking they can replicate their success in their core market in other markets when their initial success is mostly due to factors beyond their management control.
BTW FaFH, the 'established at great cost' is something of a misconception. One of the problems with the internet is it makes replicating your technology fairly easy. I have a pretty shrewd idea how much it would cost to replicate BF's platform, not least because I used to do that kind of thing for a living. You are looking at perhaps 20% of what it cost BF.
The other point I would make is that what sets BF's core business customers apart from all other internet businesses is their extreme price sensitivity. Succesful gamblers are by definition extremely price sensitive.
You'd be right in thinking I won't be buying BF shares anytime soon.
I was just daydreaming whilst writing my last post. I was just imagining an ideal world, a throw back to my youth, when my first bets were at point to points. The sad truth is that I am now locked into this exchange, and the other one, with no job to go to. My fate is in their hands.
Stop it Marksman.
You're making me cry.
But I think I know where you're coming from, and you do have my sympathies.
But tomorrow is another day. You never know what's in store for you.
You're making me cry.
But I think I know where you're coming from, and you do have my sympathies.
But tomorrow is another day. You never know what's in store for you.
pxb
I'm talking about BF maximising to the fullest the uses of the platform it built at great cost to itself.
I'm not talking about others replicating it at a lesser cost.
All the more reason in fact not to waste one iota of one's own platform, I would think.
I'm talking about BF maximising to the fullest the uses of the platform it built at great cost to itself.
I'm not talking about others replicating it at a lesser cost.
All the more reason in fact not to waste one iota of one's own platform, I would think.
FaFH, fair point.
Perhaps, it's a deliberate strategy by BF management. Call it 'making hay while the sun shines'.
Perhaps, it's a deliberate strategy by BF management. Call it 'making hay while the sun shines'.
I think the recession has a lot to do with the amount matched going down.
However for about 5 years on the american horse the lads on the us horse racing forum
including myself have all seen liquity been eroded over the years.
I really have to say its a hard job getting value there now and many times its bet the fav or nothing.
Many many rags are much higher in the pools nowadays and years ago all these had good liquidity and was higher
prices than the pools.
I think Andrew Black has done a great Job with Betfair and I will do all I can to continue to
promote and help Betfair anyway I can to increase liquidity and help the site
in the future ,like I have for the past 10 years.
We will have to wait and see.I am hoping New Jersey usa then other states open exchange betting
so we can have a whole new group of punters join the party.
I am optimistic.I have a good job and for the guys who see Betfair as a job
I think its going to be very difficult for you to make a decent living for at least the next 5-10 years.
I think it will take time.
However for about 5 years on the american horse the lads on the us horse racing forum
including myself have all seen liquity been eroded over the years.
I really have to say its a hard job getting value there now and many times its bet the fav or nothing.
Many many rags are much higher in the pools nowadays and years ago all these had good liquidity and was higher
prices than the pools.
I think Andrew Black has done a great Job with Betfair and I will do all I can to continue to
promote and help Betfair anyway I can to increase liquidity and help the site
in the future ,like I have for the past 10 years.
We will have to wait and see.I am hoping New Jersey usa then other states open exchange betting
so we can have a whole new group of punters join the party.
I am optimistic.I have a good job and for the guys who see Betfair as a job
I think its going to be very difficult for you to make a decent living for at least the next 5-10 years.
I think it will take time.
crysis...anyone?
why should it be up, when everything else is going down and the cuts are coming from everywhere
even poker that had a major worldwide boom since 2003 never managed to beat the records of 2007, why in hell does Betfair have to do any better or any sport in such times, i really don't understand why people are so astonished
the exchange will always survive imo, its what makes this site different from everything else
there will be growth for sure but first the economic/financial world needs to figure itself out before things start to move in the right direction and general confidence increases
why should it be up, when everything else is going down and the cuts are coming from everywhere
even poker that had a major worldwide boom since 2003 never managed to beat the records of 2007, why in hell does Betfair have to do any better or any sport in such times, i really don't understand why people are so astonished
the exchange will always survive imo, its what makes this site different from everything else
there will be growth for sure but first the economic/financial world needs to figure itself out before things start to move in the right direction and general confidence increases
This thread prompted to check out BF's financials. BF won't let me read their IPO prospectus cos I am in Oz. Go figure?
I did see that YonY revenue growth was 13%. For an internet 'growth' company that is a dreadful number. Especially as their Australian business has grown rapidly during that period.
I did see that YonY revenue growth was 13%. For an internet 'growth' company that is a dreadful number. Especially as their Australian business has grown rapidly during that period.
Betfair's big mistake was to copy the stock market model and make this a place where people with very limited talent are able to make a good living through cheating / copying. What should be a better deal for the average punter is mostly eroded by middlemen and cheats which is why they're continually trying to replace lost customers. "Cut out the middleman with betfair" ROFPML.
Cue the blue rinse fruit cakes with their "politics of envy" quips.
Cue the blue rinse fruit cakes with their "politics of envy" quips.
We will have to wait and see.I am hoping New Jersey usa then other states open exchange betting
so we can have a whole new group of punters join the party.
If anywhere in USA allows exchange betting, it seems difficult to believe it'll be anything to do with Betfair.
so we can have a whole new group of punters join the party.
If anywhere in USA allows exchange betting, it seems difficult to believe it'll be anything to do with Betfair.
Agree with that The Management. Had they not started up at a time when all the bookmakers were going offshore they would've been strangled at birth in this country too. In fact the first internet exchange (interbet) was strangled at birth as it had to charge both layers and backers 9% of their stake and when the guy tried a workaround which equated to clients only paying 9% of their profit (on every bet) he was hounded out by the customs and excise.
Betting exchanges do have a future but they'll be state run along with stock exchanges and all other forms of gambling. It's surely only a matter of time before governments get the "cut out the middleman" message.
Betting exchanges do have a future but they'll be state run along with stock exchanges and all other forms of gambling. It's surely only a matter of time before governments get the "cut out the middleman" message.
I'm still trying to make sense of a £1.4 BILLION valuation and net profits of £15 MILLION.Emperor's new clothes?
sandown, the profit number is largely irrellivant. BF invested heavily in the last 12-18 months, expect to see it rise as the investments pay off.
Revenue growth is the number that matters, and ex-Australia and new products, revenue growth is weak. Then there is BF's exposure to regulatory risk.
Sorry guys, but the profit number is NEVER irrelevent. It is a measure of the return on the capital value and when PE ratios are 100 then there is a very large assumption of exponential growth over a large number of years. And you are telling us pxb of the weak revenue prospects ex UK with which I agree.Until investment demonstrates that it CAN generate profits it remains exactly what it is - expenditure amortised over a number of years and described differently. In cash flow terms th e£ has gone. Only profits will recover it. It's like being asked to back heavily odds on becasue the of the potential to improve. excuse me, but that is a proposition which every day shows itslef to be unprofitable.
Sandown
Now you're sounding like a sensible, old fashioned investor. Looking for " real " earnings.
Not the done thing these days apparently.
Now you're sounding like a sensible, old fashioned investor. Looking for " real " earnings.
Not the done thing these days apparently.
Having said that the float will probably be enormously successful for the underwriters and the front line investors, and everybody else will lose their shirts in due course.
Same old.
Same old.
I cannot see where the growth areas are.
To justify its p/e, either bf has to cannibalise the client base of its bm rivals by consistently being best price (which it isn't) or move into new territories esp. the US and East Asia.
It cd easily clean up in Asia, but has very tough, well-financed rivals.
It looks to me as if the share price represents a heavy punt on expansion.
To justify its p/e, either bf has to cannibalise the client base of its bm rivals by consistently being best price (which it isn't) or move into new territories esp. the US and East Asia.
It cd easily clean up in Asia, but has very tough, well-financed rivals.
It looks to me as if the share price represents a heavy punt on expansion.
The price of a stock is determined by (projected) discounted future earnings.
For a technology company, current profit is largely meaningless, because it is too influenced by current investment.
And as I pointed out early, revenue growth from diversification should be treated with caution, because companies often do poorly in their diversifications.
Hence, revenue growth from the core business (In BF's case sports betting exchange) is the key number.
For a technology company, current profit is largely meaningless, because it is too influenced by current investment.
And as I pointed out early, revenue growth from diversification should be treated with caution, because companies often do poorly in their diversifications.
Hence, revenue growth from the core business (In BF's case sports betting exchange) is the key number.
Thank you Professor pxb.
I'm sure Goldman Sachs could learn a lot from you in pricing up this issue.
Just being cheeky. Don't take offence please.
I'm sure Goldman Sachs could learn a lot from you in pricing up this issue.
Just being cheeky. Don't take offence please.
I moved in Venture Capital circles during the dotcom bubble. I know more than most about how companies are dressed up to look good for their IPO.
pxb
i agree with your view that the value of a company is best demonstrated through a DCF of expected future earnings. Remmber that BF is now 10 years young - not a start-up - and there comes a point when you ask if their is enough "form" to go on. 10 yrs is enough. Describing expenditure as an "Investments" suggest that money was spent wisely - Gordon Brown appplied the term to all manner of spending. Revenue growth must be turned into profit at some point. You use revenues when you have nothing else to go on. In this case we have 10 yr records.
i agree with your view that the value of a company is best demonstrated through a DCF of expected future earnings. Remmber that BF is now 10 years young - not a start-up - and there comes a point when you ask if their is enough "form" to go on. 10 yrs is enough. Describing expenditure as an "Investments" suggest that money was spent wisely - Gordon Brown appplied the term to all manner of spending. Revenue growth must be turned into profit at some point. You use revenues when you have nothing else to go on. In this case we have 10 yr records.
So if they don't get the expansion into the US or other large markets that they're hoping for then what?
Never totally trust a person who prefaces statements with " I know more than most---- ".
Btw having been a dotcom bubble venture capitalist is probably nothing to screamm too loudly from the rooftops about. Unless you are currently a billionaire of course. Are you perhaps?
I hope so.
Btw having been a dotcom bubble venture capitalist is probably nothing to screamm too loudly from the rooftops about. Unless you are currently a billionaire of course. Are you perhaps?
I hope so.
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