Net Bet Blog

In our series of totally unsubstantiated rumours we are happy to report that Neteller (NLR) may be in bid talks.

In the spirit of testing the companies I report on I use Neteller regularly (unfortunately the money tends to go in one direction). The product is high quality and I have never had any problems. It is quick, efficient and importantly, totally and utterly free if used sensibly.

The FT reports:

Neteller presents juicy target [FT]

By Neil Hume and Michael Hunter

Published: May 15 2008 03:00 | Last updated: May 15 2008 03:00

Neteller was in demand late yesterday amid rumours that the online payment processor had received a takeover approach.

Traders said they would not be surprised if there was something in the speculation. Recent trading has been good and the company has cash and cash-equivalents of nearly £25m, against a market capitalisation of almost £80m. Neteller closed 6.7 per cent higher at 68p.

NLR is certainly worth the broker targets of around £1.12. I think it is worth more. It is cash rich, in a growing market, has a credible position in the financial market (with NETBANX) and would make an excellent purchase in the same way PayPal was an excellent buy for EBay. If NLR can crack Asia where it is making good progress we could be back to the £4.00 level. Re-entry to the US is also a future possibility. Undervalued at present.

If any company executives are reading, you know who you are, my advice would be to tell 888.com to buy NLR. This may indeed be one of the interested parties but 888.com, if you are not currently looking at NLR then I recommend you do so.

In other news NLR released an AGM statement this week. in light of the "rumour" I present the full text of the statement here.

"Since my statement to shareholders at our last Annual General Meeting in August 2007, I am pleased to report that the NETELLER Group has made substantial progress in rebuilding and repositioning its business to achieve its three year vision of becoming the leading provider of bold payment solutions to selected online communities.

Our restructuring into Merchant Services and Member Services divisions, launched at the start of this year, has enabled us to begin to deliver our full payment product suite to merchants both within and increasingly outside of our traditional online gambling base. The contract wins recently announced by our NETBANX gateway business are examples of this broadening of our merchant base. We continue to add
solutions and develop partnerships that over time will facilitate much broader and more cost effective use by our end-user consumers of their e-wallets. The launch of the Net+ card programme later this year should make the NETELLER e-wallet an even more compelling alternative payment solution for individuals who value security, privacy and simplicity when transacting online.

The board is pleased with the progress the Group has made in the year to date. rading in the first month of the second quarter has shown promising signs that the Group's programme launches and product initiatives are delivering increased revenue, with April's fee revenue (excluding revenue from the Group's gateway businesses, NETBANX and 1-PAY Direct, the 1-PAY e-wallet in Asia, foreign exchange and investment income) recorded at $3.8 million, an increase of 15% from March's comparable revenue. The second quarter is traditionally slower for the online gambling industry. Despite this industry trend, initial indicators are suggesting that the impact of our broadening product range and focus are already beginning to deliver benefits to the Group. With continuing emphasis on ensuring our cost base is appropriate to effectively support our growing operations, the Group is generating positive cash flows from operations on a month-by-month basis.

I extend sincere thanks to all of our employees for their continuing efforts in helping to build our rapidly evolving business across the world, to our shareholders for their continued support and commitment to NETELLER, and to our customers and merchants for continuing support of our offering and business. The board looks forward to continuing progress during the balance of the year and beyond.

The Group's next formal announcement will be an update to shareholders on the Group's
progress prior to entering our close period in July 2008."

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