Neteller???
Shares in Neteller are dropping like a rock because congress is set to vote on legislation designed to limit online gaming. From what I can tell, the restrictions would prohibit financial institutions from allowing the use of credit cards, money orders, checks, and other financial instruments to pay for online gambling. I
Since a use of Neteller's services are transfering money from their bank to Neteller and then funding their online account from Neteller, it is not readily apparent to me how Neteller is affected by the legislation. Are they considered a financial institution and is the exchange of funds from Neteller to the online site covered under the proposed law? Given the legislation may not pass and given Neteller might have the potential to circumvent these restrictions, this might be a nice opportunity to pick up some shares. Thoughts anyone?
Since a use of Neteller's services are transfering money from their bank to Neteller and then funding their online account from Neteller, it is not readily apparent to me how Neteller is affected by the legislation. Are they considered a financial institution and is the exchange of funds from Neteller to the online site covered under the proposed law? Given the legislation may not pass and given Neteller might have the potential to circumvent these restrictions, this might be a nice opportunity to pick up some shares. Thoughts anyone?
posted by Odoacer at
10:17 AM
8 Comments:
Neteller isn't even an American company. I am confused as to how, exactly, American law impacts a company headquartered in England.
Unless, of course, the British are considering a similar law.
I am a large user and a big fan of Neteller's service. Just throwing that out there.
Neteller would not be considered a financial institution as far as I now. I tried to pick up shares last year and had a tough time and finally gave up. NOt a lot of liquidity. Congrass has always wanted to go after the financial insit. as a means to "cut off" people from gaming. In fact, Mastercard and Visa routinaly prohibit online gaming transactions especially when it means taking a money back from your gambling site. I did some work on NLR last year and liked what I saw. The really make the $ when you move your dollars from say, PartyPoker to TradeSports and then on to Paradise Porker. Get move gets NLR a 2% fee from the online site.
Long and winded answer but the gist. As long as you can still transfer money from a bank account to NLR then they should be alright and even potentially benefit from such laws.
Let Freedom Ring. This country sucks. Thanks for protecting me against myself uncle Sam. Good god. Actually it may not be a bad thing if they outlaw internet gambling. That way I do not sit in front on my computer 19 hours out of every day. With dreams of becoming pseudo rich with Fed debt units. This way only 10 to 11 hours trying to make others rich.
Doug,
Now I tend to only like to argue with Toppe, aka Tamerland or whatever you want to call him, but I am a little disappointed in your response given that your a professional analyst. Neteller makes money off enormous volume of online financial transfers worldwide, and I would guess the majority are in the US, if there is a regulation that limits online gambling, which makes up the majority of those transfers, then the future of the business looks bad as lower transaction volume means lower revenues, cashflow, earnings, etc. Remember the world is multinational now, especially amongst western countries, and if one market is regulated against a product it will hurt the parent company. For example, if the UK outlawed cigarettes I would bet that MO would trade down even though the US law hasn't changed and that MO is a US company.
Having said all that I still like to argue with Toppe alot more than with you. Hope all is well.
No shit, Sherlock. But Neteller doesn't sell gambling. They are a financial middleman whose primary purpose is to accept deposits from banks, credit cards, etc. and deliver it to vendors.
The U.S. government cannot regulate vendors in this case as they are not American companies. They cannot regulate the middleman as it is also not an American company. They can regulate the banks and prohibit them from doing business with Neteller, I suppose, but Neteller is used for an awful lot more than gambling sites. Neteller is really more of an organized version of Paypal.
BTW, I am not arguing that there will not be some fallout for Neteller based on some sort of a reduction in volume. Only that if the stock is seriously taking a huge hit (I am not sure that it is) that it may be somewhat of an overreaction.
For more evidence that this frequently occurs, see the airline stocks who have fallen about 10-15% in the last 2 days based on $78 oil.
Doug,
I love the airline example; from now on I am calling you with all questions on airlines. Hope all is well.
~Ben
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