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Moneygram Earnings call this morning...They are pumped for xRapid


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They gush a bit about Ripple and xRapid "Ripple has become our key partner for settling cross border payments using digital assets" "Sooo excited to announce today that moneygram is live and

I hold gold, silver, cryptos (and I hold more precious metals than I do crypto).  It's really only Bitcoin maxis who push the "store of value" thing because BTC literally has no other use....and

I am really impressed. I just tried sending money to Greece. $500 from a US bank account to a bank account in Greece: Okay, what does Western Union offer? So please observe the A

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On 8/13/2019 at 6:43 AM, xrphilosophy said:

Western Union like many companies has done stock buybacks to artificially boost share price over the years. 

 

Sorry, but as a finance practitioner I can't let this one go.  There is nothing "artificial" about shareholder value increasing due to a stock buyback.  This is typically a good use of excess cash for a corporation.   All else constant, less shares = higher price per share, and vice versa.  It's a simple math problem and is basically increasing the value of shares to current shareholders at a price.  That is not artificial....the valuation of the company does not change, each shareholders value increases as it should - naturally -  not "artificially" - do to less outstanding float.  This is corporate finance 101.

 

 

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On 8/13/2019 at 6:15 AM, Julian_Williams said:

Everything you write maybe correct, but that does not excuse the very complacent comments from their CEO about a year ago about going digital.  I am sure that Block buster were better than  Netflicks at running a chain  of shops.  Blockbuster did not fail because it was badly managed, it failed because it was complacent and did not embrace change.  

It is well known that the legacy banking industries have not put much effort into trying to provide the services to the unbanked in underdeveloped economies, so it is natural that digital transfer services will have first success in these types of economies.   It may happen that small fintech companies come in even cheaper than a reforming Moneygram.  No shipping line managed to set up an airline.  Disruption has a habit of favouring the new over the old.  But the old that are complacent about displacement by disruptive techs stand no chance.  At least Moneygram are giving themselves the best chance.

Another good example that supports your point about companies being complacent and causing their own death is Sears. Sears thought they were on top of the world (everyone did). They built that gigantic skyscraper in Chicago and was the biggest retailer in the USA.

Unfortunately, their management were a bunch of fools who did not see any reason to change. They let Walmart basically steal everything from them. Walmart became everything that Sears should have been if they had good management that was forward thinking.

Sears profit last time I checked was around NEGATIVE $1 Billion, and they have been closing stores every year.

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3 hours ago, meegwell said:

Sorry, but as a finance practitioner I can't let this one go.  There is nothing "artificial" about shareholder value increasing due to a stock buyback.  This is typically a good use of excess cash for a corporation.   All else constant, less shares = higher price per share, and vice versa.  It's a simple math problem and is basically increasing the value of shares to current shareholders at a price.  That is not artificial....the valuation of the company does not change, each shareholders value increases as it should - naturally -  not "artificially" - do to less outstanding float.  This is corporate finance 101.

 

 

What would you say about Moneygram's 7:1 reverse stock split in 2011?

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4 hours ago, meegwell said:

Sorry, but as a finance practitioner I can't let this one go.  There is nothing "artificial" about shareholder value increasing due to a stock buyback.  This is typically a good use of excess cash for a corporation.   All else constant, less shares = higher price per share, and vice versa.  It's a simple math problem and is basically increasing the value of shares to current shareholders at a price.  That is not artificial....the valuation of the company does not change, each shareholders value increases as it should - naturally -  not "artificially" - do to less outstanding float.  This is corporate finance 101.

 

 

This post is not going to hold up well over the next 5 years. :crazy:

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5 hours ago, meegwell said:

Sorry, but as a finance practitioner I can't let this one go.  There is nothing "artificial" about shareholder value increasing due to a stock buyback.  This is typically a good use of excess cash for a corporation.   All else constant, less shares = higher price per share, and vice versa.  It's a simple math problem and is basically increasing the value of shares to current shareholders at a price.  That is not artificial....the valuation of the company does not change, each shareholders value increases as it should - naturally -  not "artificially" - do to less outstanding float.  This is corporate finance 101.

 

 

Fair enough in principle.  But when stock buybacks in unprecedented numbers, as they have been over the years, preclude re-investing in the company to keep it competitive in the new digital economy one has to wonder how whether a given company is staying competitively vital in this new economy, or simply pumping a stock price to shareholders delight.  Clearly that is unsustainable as we are seeing across the stock market after years and years of buyback euphoria. To me it seems this house of cards is about to fall (ie the overinflated stock buyback market), and in the meantime all those years lost by Western Union not staying ahead of the game may have been profitable for the moment, yet does not portend for a necesarily bright future.  The original point was not to attack stock buybacks in principle, but to point to excessive stock buyback at the fate of company re-investment could be a fatal blow to many of these legacy systems.  

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