Fintech

Anson Opposes GMP Capital’s Transaction to Consolidate Ownership of Richardson GMP

Published

4 years ago

September 3, 2020

Anson believes the Richardson GMP Transaction undervalues GMP and is based on a flawed valuation
Anson believes the RGMP Transaction strips GMP of its cash resources to the detriment of Minority Shareholders
Anson believes the Richardson Family is taking control of GMP without paying a Control Premium
Anson believes the RGMP Transaction is Highly Unlikely to Receive the Necessary “Majority of Minority” Shareholder Approval
Anson intends to vote against the RGMP Transaction

Toronto, Ontario–(Newsfile Corp. – September 3, 2020) – Anson Funds (“Anson”) manages investment funds that collectively hold approximately 8.5% of the minority shares of GMP Capital Inc. (“GMP” or “the Company”). Anson believes that the Richardson GMP (“RGMP”) Transaction, as disclosed in the Company’s press release on August 13, 2020, is unfair to the interests of non-conflicted shareholders (“Minority Shareholders”). Anson believes that the RGMP Transaction, on its current terms, is highly dilutive to Minority Shareholders and results in de facto control of GMP being transferred to the Richardson Family, a related party, at significantly less than fair value and without paying a control premium. Based on feedback from other significant Minority Shareholders, Anson believes that the RGMP Transaction will not receive the requisite Minority Shareholder approval. Anson intends to vote against the RGMP Transaction.

RGMP Transaction undervalues GMP and is based on a flawed valuation:

Anson believes that the valuation used to determine the reference value for GMP’s common shares for the RGMP Transaction is flawed. In Anson’s opinion, the valuation: (1) appears to value the GMP preferred shares at a 40% premium to their pre-announcement trading price, an excessive premium for any security with its terms, (2) applies an overly punitive adjustment for public company costs to enterprise value, and (3) does not appear to value the tax assets or the benefit of a public listing. In Anson’s estimation, the reference value of GMP common shares (on an en bloc basis) should be nearly 20% higher, holding the value of the RGMP Common Shares constant at $303 million to $380 million.

In addition, as it pertains to the valuation of RGMP’s total equity value ($303 million to $383 million), Anson would note that the implied value of the equity for 100% of RGMP as imputed by the year-to-date high trading prices of both GMP’s common shares and preferred shares, never exceeded $220 million, a level that is nearly 40% below the reference value used for the RGMP Transaction.

Stripping the Company of its cash resources:

As it pertains to the value of GMP today, the assets are underpinned by the Company’s strong working capital position, which is in excess of $123 million as of June 30, 2020, and that from a valuation perspective is straightforward to assess. If the RGMP Transaction is completed: (1) the Richardson Family effectively receives a significant portion of that value from Minority Shareholders by virtue of their RGMP preferred shares receiving a cash redemption right, and (2) Minority Shareholders are diluted by the shares issued to non-GMP RGMP shareholders, performed at what Anson believes is an off-market exchange ratio and predicated on a flawed valuation. The net effect of the RGMP Transaction is an unfair value transfer from Minority Shareholders to the Richardson Family and non-GMP RGMP shareholders.

To further highlight what Anson perceives to be the inequity in the RGMP Transaction, one must look closely at the treatment of the preferred shares of RGMP. For reference, both GMP and the Richardson Family hold preferred shares in the RGMP business. While GMP is receiving equity consideration for its preferred shares at an inflated and uncertain value (discussed above), the Richardson Family is retaining their preferred shares and in addition is receiving a cash redemption feature, thus receiving over $37 million from the Company in working capital over a three year period. Anson believes that a fair and equitable treatment would be for GMP shareholders to receive a distribution of preferred shares on equal terms as the Richardson Family and not equitizing them at what Anson would argue is an above market valuation.

Anson believes that the cash and working capital assets of GMP should be for the benefit of GMP shareholders and not for certain shareholders with different interests in the RGMP Transaction. As such, the only viable way that Anson believes a RGMP Transaction would be supported by Minority Shareholders is to distribute a significant amount of the Company’s working capital (well in excess of the $0.15 per share dividend) to those with a rightful interest, GMP common shareholders.

Taking control of GMP without paying a control premium

Anson has serious concerns that the Special Committee did not adequately test the work done by the valuator and that the negotiation process relating to the RGMP Transaction was flawed. Anson cannot identify any other reason why the Special Committee would recommend the RGMP Transaction or opine that it is fair to Minority Shareholders. In addition to what Anson would argue are the off-market economic terms of the RGMP Transaction, the Richardson Family will increase its ownership to approximately 40%, resulting in de facto control (and solidifying negative control) of GMP, without having paid a control premium, something the Board and Special Committee should have weighed in their analysis.

Anson communicated these concerns directly to the Special Committee prior to the Company entering into the definitive agreement, however those concerns have gone unaddressed. Moreover, the Company has taken steps to entrench insiders further by adopting an Advance Notice By-law on July 30, 2020, which potentially will restrict the ability of GMP common shareholders to effect positive change.

If the RGMP Transaction is consummated on its terms, Anson has serious concerns relating to governance going forward, including: (1) the quantum of voting control held by the Richardson Family, (2) the track record of what Anson believes is unbalanced value apportionment between insiders and GMP minority shareholders, and (3) the conflicted position that the Richardson Family will maintain as both preferred holders and common equity holders.

Transaction highly unlikely to receive the necessary “majority of minority” shareholder approval

Anson has heard from significant shareholders who share its views and see this Transaction as an unfair value transfer suffered by Minority Shareholders, and a misallocation of corporate resources. Due to the obvious failings in the RGMP Transaction, we are confident that Minority Shareholders will vote against the RGMP Transaction and that it will fail to receive the necessary “majority of the minority” shareholder approval.

Anson intends to vote against the RGMP Transaction.

Anson Funds:

Anson Funds is an established asset management company, founded in 2007, with $1 billion in assets under management.

For further information: Jay Lubinsky, Tel: (416) 447-8874

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/63173

Fintech

How to identify authenticity in crypto influencer channels

Published

1 day ago

April 19, 2024

Vlad Poptamas

Modern brands stake on influencer marketing, with 76% of users making a purchase after seeing a product on social media.The cryptocurrency industry is no exception to this trend. However, promoting crypto products through influencer marketing can be particularly challenging. Crypto influencers pose a significant risk to a brand’s reputation and ROI due to rampant scams. Approximately 80% of channels provide fake statistics, including followers counts and engagement metrics. Additionally, this niche is characterized by high CPMs, which can increase the risk of financial loss for brands.

In this article Nadia Bubennnikova, Head of agency Famesters, will explore the most important things to look for in crypto channels to find the perfect match for influencer marketing collaborations.

Comments

There are several levels related to this point.

LEVEL 1

Analyze approximately 10 of the channel’s latest videos, looking through the comments to ensure they are not purchased from dubious sources. For example, such comments as “Yes sir, great video!”; “Thanks!”; “Love you man!”; “Quality content”, and others most certainly are bot-generated and should be avoided.

Just to compare:

LEVEL 2

Don’t rush to conclude that you’ve discovered the perfect crypto channel just because you’ve come across some logical comments that align with the video’s topic. This may seem controversial, but it’s important to dive deeper. When you encounter a channel with logical comments, ensure that they are unique and not duplicated under the description box. Some creators are smarter than just buying comments from the first link that Google shows you when you search “buy YouTube comments”. They generate topics, provide multiple examples, or upload lists of examples, all produced by AI. You can either manually review the comments or use a script to parse all the YouTube comments into an Excel file. Then, add a formula to highlight any duplicates.

LEVEL 3

It is also a must to check the names of the profiles that leave the comments: most of the bot-generated comments are easy to track: they will all have the usernames made of random symbols and numbers, random first and last name combinations, “Habibi”, etc. No profile pictures on all comments is also a red flag.

LEVEL 4

Another important factor to consider when assessing comment authenticity is the posting date. If all the comments were posted on the same day, it’s likely that the traffic was purchased.

2. Average views number per video

This is indeed one of the key metrics to consider when selecting an influencer for collaboration, regardless of the product type. What specific factors should we focus on?

First & foremost: the views dynamics on the channel. The most desirable type of YouTube channel in terms of views is one that maintains stable viewership across all of its videos. This stability serves as proof of an active and loyal audience genuinely interested in the creator’s content, unlike channels where views vary significantly from one video to another.

Many unauthentic crypto channels not only buy YouTube comments but also invest in increasing video views to create the impression of stability. So, what exactly should we look at in terms of views? Firstly, calculate the average number of views based on the ten latest videos. Then, compare this figure to the views of the most recent videos posted within the past week. If you notice that these new videos have nearly the same number of views as those posted a month or two ago, it’s a clear red flag. Typically, a YouTube channel experiences lower views on new videos, with the number increasing organically each day as the audience engages with the content. If you see a video posted just three days ago already garnering 30k views, matching the total views of older videos, it’s a sign of fraudulent traffic purchased to create the illusion of view stability.

3. Influencer’s channel statistics

The primary statistics of interest are region and demographic split, and sometimes the device types of the viewers.

LEVEL 1

When reviewing the shared statistics, the first step is to request a video screencast instead of a simple screenshot. This is because it takes more time to organically edit a video than a screenshot, making it harder to manipulate the statistics. If the creator refuses, step two (if only screenshots are provided) is to download them and check the file’s properties on your computer. Look for details such as whether it was created with Adobe Photoshop or the color profile, typically Adobe RGB, to determine if the screenshot has been edited.

LEVEL 2

After confirming the authenticity of the stats screenshot, it’s crucial to analyze the data. For instance, if you’re examining a channel conducted in Spanish with all videos filmed in the same language, it would raise concerns to find a significant audience from countries like India or Turkey. This discrepancy, where the audience doesn’t align with regions known for speaking the language, is a red flag.

If we’re considering an English-language crypto channel, it typically suggests an international audience, as English’s global use for quality educational content on niche topics like crypto. However, certain considerations apply. For instance, if an English-speaking channel shows a significant percentage of Polish viewers (15% to 30%) without any mention of the Polish language, it could indicate fake followers and views. However, if the channel’s creator is Polish, occasionally posts videos in Polish alongside English, and receives Polish comments, it’s important not to rush to conclusions.

Example of statistics

Wrapping up

These are the main factors to consider when selecting an influencer to promote your crypto product. Once you’ve launched the campaign, there are also some markers to show which creators did bring the authentic traffic and which used some tools to create the illusion of an active and engaged audience. While this may seem obvious, it’s still worth mentioning. After the video is posted, allow 5-7 days for it to accumulate a basic number of views, then check performance metrics such as views, clicks, click-through rate (CTR), signups, and conversion rate (CR) from clicks to signups.

If you overlooked some red flags when selecting crypto channels for your launch, you might find the following outcomes: channels with high views numbers and high CTRs, demonstrating the real interest of the audience, yet with remarkably low conversion rates. In the worst-case scenario, you might witness thousands of clicks resulting in zero to just a few signups. While this might suggest technical issues in other industries, in crypto campaigns it indicates that the creator engaged in the campaign not only bought fake views and comments but also link clicks. And this happens more often than you may realize.

Summing up, choosing the right crypto creator to promote your product is indeed a tricky job that requires a lot of resources to be put into the search process.

Author Nadia Bubennikova, Head of agency at Famesters

Author

Nadia Bubennikova, Head of agency at Famesters

Fintech

Central banks and the FinTech sector unite to change global payments space

Published

2 weeks ago

April 4, 2024

Peter Tolan

central-banks-and-the-fintech-sector-unite-to-change-global-payments-space

The BIS, along with seven leading central banks and a cohort of private financial firms, has embarked on an ambitious venture known as Project Agorá.

Named after the Greek word for “marketplace,” this initiative stands at the forefront of exploring the potential of tokenisation to significantly enhance the operational efficiency of the monetary system worldwide.

Central to this pioneering project are the Bank of France (on behalf of the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. These institutions have joined forces under the banner of Project Agorá, in partnership with an extensive assembly of private financial entities convened by the Institute of International Finance (IIF).

At the heart of Project Agorá is the pursuit of integrating tokenised commercial bank deposits with tokenised wholesale central bank money within a unified, public-private programmable financial platform. By harnessing the advanced capabilities of smart contracts and programmability, the project aspires to unlock new transactional possibilities that were previously infeasible or impractical, thereby fostering novel opportunities that could benefit businesses and consumers alike.

The collaborative effort seeks to address and surmount a variety of structural inefficiencies that currently plague cross-border payments. These challenges include disparate legal, regulatory, and technical standards; varying operating hours and time zones; and the heightened complexity associated with conducting financial integrity checks (such as anti-money laundering and customer verification procedures), which are often redundantly executed across multiple stages of a single transaction due to the involvement of several intermediaries.

As a beacon of experimental and exploratory projects, the BIS Innovation Hub is committed to delivering public goods to the global central banking community through initiatives like Project Agorá. In line with this mission, the BIS will soon issue a call for expressions of interest from private financial institutions eager to contribute to this ground-breaking project. The IIF will facilitate the involvement of private sector participants, extending an invitation to regulated financial institutions representing each of the seven aforementioned currencies to partake in this transformative endeavour.

Source: fintech.globa

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Fintech

TD Bank inks multi-year strategic partnership with Google Cloud

Published

2 weeks ago

April 4, 2024

Peter Tolan

td-bank-inks-multi-year-strategic-partnership-with-google-cloud

TD Bank has inked a multi-year deal with Google Cloud as it looks to streamline the development and deployment of new products and services.

The deal will see the Canadian banking group integrate the vendor’s cloud services into a wider portion of its technology solutions portfolio, a move which TD expects will enable it “to respond quickly to changing customer expectations by rolling out new features, updates, or entirely new financial products at an accelerated pace”.

This marks an expansion of the already established relationship between TD Bank and Google Cloud after the group previously adopted the vendor’s Google Kubernetes Engine (GKE) for TD Securities Automated Trading (TDSAT), the Chicago-based subsidiary of its investment banking unit, TD Securities.

TDSAT uses GKE for process automation and quantitative modelling across fixed income markets, resulting in the development of a “data-driven research platform” capable of processing large research workloads in trading.

Dan Bosman, SVP and CIO of TD Securities, claims the infrastructure has so far supported TDSAT with “compute-intensive quantitative analysis” while expanding the subsidiary’s “trading volumes and portfolio size”.

TD’s new partnership with Google Cloud will see the group attempt to replicate the same level of success across its entire portfolio.

Source: fintechfutures.com

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