BETFAIR floats - will you invest?

That is interesting. 65% of the valuation is based on existing core Betfair business and the rest is anciliary and new business. They have a big issue valuing it though. How can you have a 10-15 times multiple spread? The total value based on 10 times is the same, more or less, as the core Betfair business on a 15 times multiple. So it comes down to the multiple for the core business and if you think it's closer to 15 than 10, then you are getting most of the rest of it for free and you take your chances.
 
Statement released today suggests shares will be put up at between £11-£14 and means the value is somewhere between £1.16 billion and £1.48 billion.
 
Had a quick look at betdaq on Saturday and they were doing roughly 50per cent of betfairs level pre race.
They offered me a 2 per cent commission deal last year -might have to give it serious consideration as I am practically an employee of Betfair with the existing commission structure.
Does anyone think Betfair might attempt to take over betdaq or could betdaq be taken over by someone seriously wanting to challenge Betfair.
 
You could be right Gearoid.I know they make a big effort to get the Irish on course boys playing with them-I must monitor them closely over the next few weeks.
 
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Quote: Martin Cruddace of Betfair ...................
"Betfair pays a Levy of 10% of our gross profits derived from British horseracing from UK customers".

What Levy does Betfair pay on profits garnered from NON-British residents punting on British horseracing, would anyone know? (Or do they trouser all the profits derived from these sources?)

Thanks in advance.
 
icebreaker said:
What Levy does Betfair pay on profits garnered from NON-British residents punting on British horseracing, would anyone know? (Or do they trouser all the profits derived from these sources?)

Thanks in advance.
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BF paid the 10% Levy voluntarily on that part of the business in 2009 but declined to do so again this year because of a perceived witch hunt by those running British racing. The money is to be diverted into grass roots causes in racing. It is a voluntary Levy payment because non-UK customers don't bet into the UK. They bet into BF Malta.
 
Betfair will be listed on the LSE next week. Shares were floated at £14 and in the grey market moved into the £15s today. Given the small lot size, it is expected that additional shares will be traded to satisfice demand. Up to 33% of the shares can be traded although other shares are locked in for up to 1 year before they can be sold to allow for orderly sale of shares. Will be interesting to see how they get on come Tuesday. Those that bought in at £14 have already booked, potentially, a 10% profit in a day!!
 
Cantoris said:
Given the size of this IPO, I'd be a buyer and hold for a month, then offload at any price. The share price can be volatile after a month or two and you could end up buying back in again at a price below IPO price.
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Betfair earnings fall short of hopes
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Tuesday, 14th December 2010 12.30pm
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Betfair, the world's largest betting exchange, reported lower than expected half-year earnings today, sending its shares down more than 9 percent to well below their price in a flotation just two months ago.
Betfair, founded 10 years ago by one-time professional gambler Andrew Black and former JP Morgan trader Edward Wray, said results in poker had fallen short of expectations while the cancellation of horse racing meetings due to bad weather had moderated growth rates in the current quarter.
James Hollins, analyst at Evolution Securities, said core earnings were below his estimate and the market consensus. "Of greater concern is the decline in 2Q horse racing revenue ... We find it hard to marry the group's premium rating with myriad regulatory issues and the need to 'address challenges' in its core horse racing product," Hollins said.
Shares in Betfair, which had been sold at 1300 pence in October's IPO, were down 9.7 percent at 1067p by 1035 GMT. They traded as low as 1040p.
"Recent weather conditions in the UK and Ireland ... caused a number of race meeting cancellations, moderating overall growth rates in the quarter to date," the company said in a statement.
Betfair CFO Stephen Morana said the group's target of returning to 2010's levels in poker in 2011 was not likely to be met, with core poker revenue down 6.5 percent after the migration of users onto a new platform in July created churn.
"Being realistic, it's going to take longer," Morana said, declining to give a new timeframe.
The group nonetheless maintained its target for double-digit growth in adjusted EBITDA in 2011. "We are targeting double digit growth for 2011 overall... but poker will be a challenge for us," said Morana. Betfair said it would address the issues in poker and horse racing with a number of product enhancements and initiatives in the second half. The company said its underlying adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 24 percent to 31.2 million pounds in the six months through October. Underlying revenue rose 12.3 percent to 188.5 million pounds, with the strongest performing product being Games, which posted a 17.6 percent rise in core revenue in the first half. Betfair generated core revenue growth of just 1.6 percent year-on-year in the second quarter. (C ) Reuters
 
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