Hello to the JP Morgan team who are reading this thread. You might not have heard of me but Iām Cash Cow and I have quite the reputation around these parts. Iāve just been looking into your organisationā¦
Thatās a mighty nice share price youāve got there. It would be a shame if something was to happen to it because, hypothetically speaking, I decided to invest a few hundred in it with my Diamond Hands Hooves Of Doom and impressive past performance in āinverse-investingā.
Anyway, Iām willing to accept Ā£1bn for my Freetrade shares. Thatās just for mine. You can work out a separate price with everyone else for theirs.
More generally and unrelated to any specific comment. This thread has become all gloom and doom. Freetrade is still the same business it was before they started exploring all their options. Not for nothing but they are also exploring a fund raise and for all we know they explored a sale/merger in R7 as well.
Some of the comments here are incredibly cynical, and seem wrapped up in an emotional connection to the investment. If you roll back 18 months or so and playback the euphoria of markets drowning in money, multi yard valuations and book talking by some of the crowdfunding investor base itās easy to understand why.
Yes, execution on strategy has been slower than many wanted/expected but fundamentally, the management team are competent (and connected), and in my view have responded appropriately to a frankly mad operating environment. When you remove the emotion and assess objectively, what the team has built, given the timeframe and their frankly modest funding (when compared to some of their competitors) performance has been impressive.
Valuations very tricky at the moment, but there strategic investors, with deep pockets looking for opportunities, and they critically understand the value prop. That JPM are at the table (if confirmed) is significant, but excitement should be tempered until a deal is baked, JPM are looking at a lot of opportunities all the time.
The problem isnāt only the performance (regardless of whether you regard it as good or bad) but ultimately cash burn and short-medium term funding. Even with the recent raise FT is rapidly running out of cash.
If I were cynical Iād wait for the cash to run out and pick up the IP and assets in a fire sale. Of course the VCs already invested have an incentive not to let that happen and may choose to put in more money to keep FT alive (though that may come at the expense of the crowd) - it will depend on a lot of factors that Iām sure are occupying FT at the moment.
I donāt remember or donāt have at hand the deck from Sept '23 but I imagine with cutting staff and moving more towards profitability - how close are they if it were just the UK. Have they proven the model as a profitable one and do they need money just to expand in EU/JPN/AUS/CND. As in - are they in the same place Nutmeg were or are they further?
You are right. There is the further point that that whether a IP is valuable or not is in the eye of the beholder.
For example, there are several things that people have listed above that frankly will have no value to JPMorgan because It already has those things.
Personally, I find it interesting that JPMorgan might really be interested because JPMorgan not too long ago offloaded all their direct investment trust retail customers to Share Centre which then were acquired by Interactive Investor and the Family Association. Of course They may have decided the Chase operation could benefit.
Someone who holds a different view to others above is criticising people for being cynical and emotional ( not you!) ā¦ but it can be argued that person is doing precisely that and then projecting his emotions ā¦.
Everyone is entitled to their opinions ā¦ and provided the exhaustive list of the probability space has been listed at least one of those views is correct.
But of course profitability might not matter. The acquiring organisation will have its own reason(s) for an acquisition.
I think the key thing for many acquirers would be how much money do they need to put into Freetrade to make it fit into their business plans.
The return on investment is not merely the return on the acquisition (I mean payment to shareholders)
I am not sensing that. What I am sensing is a considerable amount of naĆÆvety.
Ultimately, this is a risky start-up (whether one recognises that or not) with a relatively short runway. The board and the management has to prepare for that because it is responsible. It will have to reckon with whether is a āgoing concernā or not and if so under what strategic imperative.
The article in CityAM frankly is junk. The reality remains though that the Freetrade has to get money to survive let alone grow.
Honestly, I am not sure what the attraction of Freetrade would really be to JPMorgan even if you look at Chase. Yes, I can believe the company would have been touted to them and they may even look through the paperwork.
I can see how some other companies might find parts of Freetrade an attractive proposition. But I would not attempt to guess what price they may put on that.
Totally agree and it was maybe disingenuous of me to gloss over this aspect of the cold harsh reality of the current environment weāre living through. I do think (some of) the invested VCs want Freetrade to succeed, which 100% is not a given in the industry.
My intention is really to try to provide a thoughtful counterpoint. I think @bitflip youāve been here long enough to remember the boileroomesque commentary and book talking. My point is essentially that if you bought into that, I can understand why there are some serious emotional reactions, but the reality is investing in this early stage business was always going to be an extremely risky endeavour.
Iāve always been transparent, I believe in the business, and still largely trust the management to do their best to navigate the storm, just think sometimes you need to bring a bit more balance into the story, before euphoria or the perpetual doom loop of misery sets in.
Fair enough. People are passionate. Passion cuts both ways.
It would be easy for me to write an essay here but I will leave it at this: Freetradeās position is not merely a consequence of the state of the money markets. Management has a lot of responsibility. There are others (competitors) that have risen in the past few months and have taken money off the revenue table. This is not a new thought. It has been expressed many times in many threads.
I have read hundreds of messages over many months and feel that here is nothing particularly negative here in the posts before yours. To put it simply there are some investors who want out. They want to do something else with the money they invested. They have recalibrated their expectations or have given enough time (in their view) for the egg to boil. Others are new investors and they have moved along with the herd over the past few rounds. Maybe some of them are having second thoughts. All are legitimate and valid opinions.
One person above said āsomething about the last pitch just didnāt sit rightā. Others might not agree with the sentiment but that doesnāt make the view holderās opinion negative or unreasonable. We make our own calls for our own reasons.
Have previously mentioned Tim Harfordās book the Undercover Economist, which I recommend people to read, in several other posts on this forum. It recommends one should examine oneās own emotions (catch them in the act, in a manner of speaking) as they influence what we think we have read or seen.
I recently finished this and could hardly recommend it enough. Heās an incredible writer who explains a relatively impenetrable subject in language anyone can understand.
Iām just starting on another of his books, The Logic of Life, which explores economic rationality.
and impressive past performance in āinverse-investingā.