Monitise has suffered a staggering drop in value following Visa’s decision to sell its stake in the company late last year.
With shares in the mobile banking startup continuing to decline, many investors will be wondering if now is the right time to buy or sell shares in Monitise.
The London-based firm had a peak share price of 82.75p less than a year ago, but stock in the firm is now trading hands for just 13.95p. To put the company’s decline in context, the business’ value has fallen from £1.38 billion last year to just £326 million according to the Telegraph.
The startup, which was founded by Alastair Lukies in 2003, was initially successful and attracted high-profile clients such as HSBC, RBS and NatWest. However, the firm recently downgraded expectations for its 2014 revenue increase to 40 per cent, before the actual figure came in at 31 per cent.
Following the news and the subsequent stock collapse, Monetise initiated a strategic review of its business and put itself up for sale.
“Monitise plc notes the media speculation in connection with the initiation of its Strategic Review on 22 January 2015 and confirms that it has received a number of expressions of interest in a range of potential corporate transactions including a merger with a third party or a sale of the Company,” the firm explained in a statement. “Discussions are at a highly preliminary stage and there can be no certainty that any transaction will result.”
The company remains debt-free, but has struggled to make a profit in recent times and is expected to make a loss of between £40 million and £50 million for the 12 months ending June 2015.
Industry analysts have also questioned Monitise’s long term strategy of turning its mobile banking app into an e-commerce hub, meaning anyone willing to invest in the ailing firm will be taking a substantial risk.