I don't know much about the City - some might say I don't know much about the betting industry either, but that's by the by - but I know a little bit.
The basics perhaps.
What little I do know revolves principally around the only company I own a few shares in, The Sporting Exchange Limited, parent company of Betfair.
"If you'd asked me in January 2002 whether my allocation was a fair reflection of my input into Flutter, I'd have said: 'no'"
Incidentally, I own the shares because I used to work for Flutter - now part of Betfair.
If you'd asked me in January 2002 whether my allocation was a fair reflection of my input into Flutter, I'd have said: 'no' but, almost five years down the line, all of which I've spent working on a (notionally at least) direct competitor to Betfair, I'd probably say: 'I've had a right result.'
However, I digress.
"Founders Andrew Black and Edward Wray own something like 15 million each (not enough in my view)"
Suffice to say that, armed with my share certificates, my ongoing interest and my Grade B Economic A Level, I naturally consider myself the world's leading authority on the subject.
It's my understanding that there are a total of 100 million shares in The Sporting Exchange Limited.
Founders Andrew Black and Edward Wray own something like 15 million each (not enough in my view, seeing as they founded it, but obviously they're happy enough or they wouldn't have cut the deals they've evidently cut to end up with that number).
Josh Hannah, my old Chief Executive and lifelong friend at Flutter, owns 1.5 million (which I'd say is approximately 1.5 million more than he deserves but who said life is fair?) and I've got three (which is definitely three more than I deserve).
Well, a few more than three, but you get my drift.
The Sunday Times earlier in the year - and probably so they could list Wray and Black in their rich-list - put a notional value of £700 million on Betfair (£7 a share) and arguments are rife over this valuation, especially in light of Betfair's most recent profit figures, which were £22 million.
Companies are worth more than their annual profits, but not necessarily over 30 times as much.
"there is a saying that 'it is better to travel than arrive' and that sentiment... has more to do with valuations than current actual profits"
Then again, there is a saying that 'it is better to travel than arrive' and that sentiment over future potential profits often has more to do with valuations than current actual profits.
Given this may be the case, the case for floating sooner rather than later seems pretty strong to me.
Yes, Betfair might be worth more once the issue of UK taxation - though Betfair could go offshore to Malta anyway, possibly doubling their annual profits with tax breaks in the process is resolved - is resolved, and if the trade barriers were to come down in China and the USA.
However, once the financial markets market perceive that Betfair has little further scope for expansion, the share price will level out and possibly fall.
That might be what Stephen Hill thinks, because the then Betfair Chief Executive resigned abruptedly at an October Baord Meeting after it was decided that the flotation would be delayed.
"I remain steadfast in one prediction, namely that 'The Sporting Exchange plc' will be bad news for Betfair's users."
Now Hill's concerns may revolve solely around his early desire to exercise the shares he has been allocated as a reward for guiding the company to 'plc in waiting' status in terms of corporate governance and structure etc, but he might also have concerns over the wisdom of a waiting strategy.
Whether he's right, or the rest of the Board, he's now no longer a member of, are right, I really wouldn't know nor pretend I'm qualified to predict.
But, whatever happens, I'm afraid I remain steadfast in one prediction, namely that 'The Sporting Exchange plc' will be bad news for Betfair's users.
Once Betfair is run for the benefit of its shareholders, the talk won't be of lowering commission rates, but of how high users will tolerate them climbing before the law of diminishing returns sets in?
The big financial institituions who will buy into the company will demand that optimum commission ceiling be located, and moved to, as quickly as possible.
Hence, one way or another, I'm rather looking forward to this flotation - I can cash in my shares and buy a KFC, and the odd disaffected Betfair commission payer might find his way to www.backandlay.com.
Bit of a win-win situation - I like those.
BBC
