Stocks

Omega’s Cooperman Keeps The Faith With Monitise Plc

Omega Advisers founder Lee Cooperman expressed enough conviction in Monitise Plc (LON:MONI) (OTCMKTS:MONIF) story during his interview with CNBC that he is willing to enhance his firm’s stake in the company to over 16.5%.

In his Monday interview on CNBC with Scott Wapner, the well-respected fund manager expressed confidence in Monitise by indicating that he hadn’t sold a single share of Monitise despite its huge decline.

Visa to assess its stake in Monitise

Last month, Visa Inc (NYSE:V) announced that it was assessing the sale of its 5.5% stake in Monitise Plc (LON:MONI) (OTCMKTS:MONIF) and would develop related mobile payment resources in-house.

However, some analysts including Mark Palmer of BTIG, felt Visa’s move to develop resources in-house would make it more likely that Monitise will eventually be acquired by International Business Machines Corp. (NYSE:IBM).

Monitise’s share price dropped substantially over the last month as investors bailed out over concerns about competition and the fact that Visa Inc (NYSE:V) is “considering its options” in disposing of its 5.5% stake in the firm. Mark Palmer suggests that the mobile payment firm’s switch from a one-time license fee business model to a subscription-based model might eventually work out well based on Adobe Systems Incorporated’s similar transition over the last couple of years.

Palmer also argues that Apple Pay, considered by some to be a revolutionary new cell phone payment method, could lift the fortunes of Monitise Plc (LON:MONI) (OTCMKTS:MONIF).

Cooperman has sufficient conviction

During his interview on CNBC, Cooperman essentially put a floor under the level at which Visa Inc (NYSE:V)’s 5.45% stake in Monitise’s shares would be valued. Cooperman also revealed that he had not sold a single share of Monitise during the stock’s recent downdraft. Moreover, he disclosed that he had bid 27.25p for Visa’s entire stake and was rebuffed.

Following the CNBC interview, Mark Palmer of BTIG noted that Cooperman’s statement was meaningful not only because it put a floor under Monitise’s stock price, but also because it demonstrated that the fund manager had sufficient conviction in the story to be willing to enhance his stake in Monitise to over 16.5%. Thus the twin blow from Visa of its assessing its stake in Monitise and its intention to bring its development of mobile capabilities in-house created an impression that Monitise had been orphaned. However, Cooperman’s comments in his latest CNBC interview provided sufficient reassurance that the firm retains strong sponsorship.

Mark Palmer believes that Apple Pay could accelerate adoption of mobile money in general, individual banks’ desire to develop their own payment platforms distinct from Apple could create opportunities for Monitise Plc (LON:MONI) (OTCMKTS:MONIF), which is uniquely positioned to enhance banks’ development efforts. Thus Mark Palmer of BTIG believes the latest developments could actually spell a “double win” for the mobile payment firm.

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