Short interest in Monitise Plc has surged since our last report on the online banking company. The London-based retailer has been the recipient of constant attention from shortsellers. According to positions disclosed to the FCA, short interest in Monitise Plc is now up from 3.7% at the end of June to 8.6%. This makes Monitise Plc (LON:MONI) (OTCMKTS:MONIF) the second most-shorted company in the U.K. after WH Smith Plc (LON:SMWH).
Tiger Cubs bets against Leon Cooperman’s big long in Monitise Plc
Among the shortsellers are Coatue Management, Jeicho Capital, TT International, Oxford Asset Management and Marshall Wace. These funds are betting against Leon Cooperman’s big long in Monitise Plc (LON:MONI) (OTCMKTS:MONIF). Cooperman owns nearly 222 million shares of Monitise and is the top shareholder.
Even though analysts across the board are predicting that good things are in store for the automated banking system, Monitise has yet to feel the excitement. Shares of the company are down over 35% so far this year. In a recent report from the British Bankers’ Association, the end of branch banking was predicted as online payment systems take over. However, the transition of banks to a more digital environment has been slow. A report from McKinsey & Company said that European banks are adapting to the change at snail’s pace.
Monitise Plc underpresseure since it reported earnings
Monitise Plc (LON:MONI) (OTCMKTS:MONIF) has been under pressure since it reported lower than expected revenue for FY2014. The surge in short positions came around the same time. The company intimated that it would experience a 31-33% ( £95-97 million) growth in revenue in this year compared to the 40% (£102 million) increase it had guided for earlier. Most analysts have taken this news in stride and said that since Monitise is going through a transition in its business model, the reduction is understandable.
Although Barclays maintained its Overweight rating on the stock, the firm said in its note dated July 9, 2014 that Monitise has to improve its communication and execution. Barclays was not impressed by the way the company communicated this change in guidance. Monitise is changing its revenue model from a license-based approach to a subscription-model. The company had announced in March that it will suffer in the near term from this change as it moves its focus to long-term revenue-sharing subscriptions in place of short-term licensing deals.