The Motley Fool

It’s Surely Game Over For Monitise Plc Now, Isn’t It?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The big shock for small-cap investors this week was the departure of the chief executive of Monitise (LSE: MONI), Elizabeth Buse. Well, it was a shock for those who had failed to see the writing that’s been on the wall for quite some time, but it certainly didn’t surprise all of us.

Founder and co-chief Alastair Lukies had previously left, and Ms Buse’s departure was said to be “due to her desire for personal reasons to return to the United States“… Prior to her stint at Monitise, Ms Buse had been Executive Vice President of Global Solutions at Visa Inc., and therein lines the true tale.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Monitise had been a rising star among growth investors, especially with Visa as an early shareholder — if Visa was going to use Monitise’s mobile payment system, its future was surely assured. And the share price duly soared, as high as 80p in February 2014.

Then it all went bad…

But the company hasn’t been able to find a way to make a profit yet, and shareholders had an unpleasant surprise in September 2014 when Monitise announced that Visa was “undertaking […] an assessment of [its] investment stake” in the company. From that date, hastened by warnings that losses would be worse than expected, the share price plunged as far as 5.8p by 8 September 2015.

Then the next day, things got even worse, when Monitise reported a 6% fall in revenue for the year to £89.7m, with an adjusted loss after tax of £55.3m — and told us of Ms Buse’s impending departure. The share price duly collapsed further, and stands today at a pitiful 2.6p — 97% down from its peak.

Optimistic talk

Ms Buse is reported by the Financial Times to have said she believes “…that the changes we have made to our balance sheet reflects much more strongly the business we will be than the business we were“. She reckoned that business-to-be will be a stronger one, but I’m afraid the only kind of business I can see Monitise becoming is an ex-business.

That, to me, has been inevitable since the day Visa decided to pull the plug and walk away — and I’d wager that Ms Buse’s homeland must have started tugging at her heartstrings at around the same time.

Monitise enjoys no real barriers to entry in the payments business, as it just doesn’t have enough big companies committed to its system in a way that would make it too expensive or too damaging for them to move elsewhere. It’s a market that the big players with massive financial clout can walk into and take over before your hat can touch the floor — and we can see that with Apple‘s Apple Pay, which is making big inroads into the US market and is set for an attempt at something similar here.

It’s too late

No, what Monitise needed to do was get a big financial partner on board, and then have that partner adopt its payment system for all its mobile transactions and perhaps even buy out the company for a fat return to shareholders. For me, that chance has been blown.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of Monitise and Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.