Neteller

[DVO]

Neteller has potential. For info, just Google it, get to their website, and go to Investor relations.

Here are my initial thoughts.

1) Their market will grow for quite a while. I do not see an end to this poker boom ( and I'm super skeptical of 'fads.') Gambling is hard-wired into many many people; if you doubt that, consider all the skeptics that for decades have been calling to an end to Vegas' growth. Yet it never stops. And, I submit, poker's allure is enduring. When I walk into the room and my 12 year old kid is playing with 3 of his buddies..obviously growth will level off, but let me tell you, it has an addictive quality that rivals tobacco, alcohol, etc. ( No lecture on parenting, please, it's under control!)

2) Numbers are a bit difficult to understand, largely because they have not been public long enough to have audited financials. But it looks like growth is tremendous and I dont' see why it would slow down. They are expanding into Europe and Asia.

3) Even though the stock has tripled since its IPO, the P/e is around 20. Not bad.

4) I don't like the Related Party transactions nor the issuance of generous options to employees. That's just a way to screw outside shareholders (us). These guys obviously are not taking any pages out of Buffett's book.

4) I don't use Neteller, so I'd like to know why they are so popular. Do they really hit you up for 11% on each transaction? I must be reading that wrong ( from their investor presentation, see the website).

Could a user pleae give me some insight as to :

1)what they like/dislike
2) Competition ( What happens, for instance, if Master card starts letting you use your card to fund poker? Why would they not start, once they see the 66% margins Neteller has?)


This might be a good speculative play ( not a core investment, not for the faint of heart, butlots of upside potential). I've got some work to do before I decide.