Friday, 9 February 2018

Working in Tandem to help their Seedrs investors by reducing their value by 96%?


Tandem, the online bank, is now offering its Seedrs shareholders, the right to purchase new shares at £0.60. When Tandem first raised money on Seedrs, the shares were worth over £13.


This is all part of a 'deal' cobbled together by the ever smiling, bearded founder of Tandem, Ricky Knox. Ricky is apologetic about the dilution. He is also apologetic about the share price. 

This all comes about because Ricky had lost Tandem's banking licence; which for a bank, is serious. In order to get it back, Ricky bought Harrods Bank and as part of that deal was required to raise £25m. £10m of this came from existing shareholders convertible loan notes. The other £15m was underwritten by a Middle Eastern fund. 

Ricky is careful to point out that despite the fact the company had already trodden all over investors by removing their pre-emption rights, he is now offering them a chance to limit their dilution by buying shares at the new £0.60 price. He goes on to explain that this is in no way an attempt by the company to get further investment from them. 

As one sanguine investor put it - a £500 investment in the original Seedrs campaign is now worth £20, so to get your money back the company would have to be worth £1.5bn. He also points out the crucial con - undrum that to not invest is going to mean you wont ever see your money back.

They should write a song for you Ricky - like the Ricky Baker number.  

2 comments:

  1. The investors should have been questioning the 60M valuation from the onset - very high given that the business was totally untested. I hope the public, who use CC and seedrs, are starting to realise that investing is a sober exercise and these is not place for hype - such an asymmetry in interests.

    ReplyDelete
  2. The word "bank" adds another £50m to the valuation as it's easy for the founder to portray this image of grandeur....not to mention they didn't say there was a very likely chance the banking licence would disappear.

    More lies to the crowd. Seedrs will do nothing about this as per usual.

    ReplyDelete