Short interest in the U.K.-based Monitise Plc (LON:MONI) (OTCMKTS:MONIF), a mobile payment solutions company, has risen significantly over the past few weeks. According to short positions disclosed to the FCA, 3.6% of Monitise’ shares are out on loan. The short interest is likely higher than this as only positions above 0.5% must be disclosed to the regulatory authority. While the bearish interest is not overly large, it is worth mentioning because the bulk of it was accumulated over the past few weeks, with the short interest rising from 0.7% at the beginning of May to 3.6% as of today.
Laffont’s Coatue shorts Monitise
It appears that the shortsellers have made the right call so far. Monitise Plc (LON:MONI) (OTCMKTS:MONIF) shares have fallen 16% over the first half of the year. Tiger cub Philippe Laffont’s Coatue Management is betting against Monitise. Coatue revealed a short in early May and has now increased it to 0.85% of the company’s outstanding shares. Others who are betting against Monitise include Jericho Capital Asset Management and TT International. Coatue is known for its technology-focused portfolio; Laffont has invested in tech start-ups, but has been expanding his short portfolio lately.
This is not the first time, Coatue has taken the short side of a controversial battle ground stock. As we recently reported, Coatue has sided with Gotham Research and opened a short in Quindell PLC (LON:QPP). The bet pits the two against top UK hedge fund, Polygon.
Monitise – Cooperman’s best idea
On the long side, Leon Cooperman has been touting the company for some time now, as first reported by ValueWalk, based on comments from Cooperman’s shareholder letter. Cooperman’s Omega Advisors, which manages over $10.5 billion, holds 10.9% of Monitise Plc (LON:MONI) (OTCMKTS:MONIF), or 200 million shares. Cooperman has been talking up the company and believes that the company will reach 100 million customers by 2016. In a recent interview with CNBC, Cooperman said that Monitise is liked by customers on both ends. The firm’s service makes it easy for the users to make payments online, and at the same time facilitates banks in collecting payments. He also said that Monitise poses a threat to older technologies who are investing more and more in the company to ensure their future standing. Mastercard Inc (NYSE:MA) has invested $25 million in the company whereas Visa Inc (NYSE:V) holds a major stake in Monitise. Cooperman said that stock is going to double from here, however Monitise is down 11% since the day of the interview.
Monitise on a spree of acquisitions
Monitise Plc (LON:MONI) (OTCMKTS:MONIF) recently made two important acquisitions. The firm bought Markco Media and Last Second Ticketing Limited for 24.5 million pounds upfront, 2 million pounds in two years and another 28 million possible in a two year aggressive earnout. Supporters of Monitise believe that the company is out to revolutionize the mobile banking space. Canaccord Genuity said in their latest note that with these acquisitions, Monitise now has access to 80% of the U.K.’s leading retailers which introduces it to several new brands and potential users. Canaccord’s analysts also have high hopes for the Yaap project the company has launched in Spain. Yaap is a joint venture of Caixabank, Banco Santander and Telefonica. According to Monitise, Yaap Shopping is a virtual m-commerce service where retailers in Spain can generate revenue through offers, discounts and loyalty programmes.
The company has set a high goal of achieving 30%+ EBITDA margins and 200 million users by 2018; it currently has a 28 million user base. Visa Inc (NYSE:V) owns a major stake in Monitise and is involved in several regional collaborations with the company. Monitise Plc (LON:MONI) (OTCMKTS:MONIF)’s business is also growing in India, China, Indonesia and Hong-Kong.