Monitise shares plunge as Visa ponders stake sell-off

Shares in Monitise plummeted more than 25% in morning trading on news that Visa is "considering its options" on its 5.5% stake in the mobile money firm.

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Monitise shares plunge as Visa ponders stake sell-off

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Visa took a 14.4% stake in Monitise after signing a five year $13 million partnership deal with the UK outfit back in 2009.

The stake has gradually been whittled down to 5.5% and now Visa has brought in JP Morgan Securities as it plans its next move in a world in which it is "lessening its dependence on external mobile development resources".

Says Bill Sheedy, EVP, corporate sratagy, Visa: "Consistent with Visa's increased investment in our in-house capabilities, and the substantial growth in Monitise, Visa is considering its options with regard to its Monitise stake."

Visa Europe and MasterCard also both hold stakes in Monitise.

As per their agreement, Monitise will provide Visa with mobile platform development services through 2016.

The news comes days after Monitise posted a full year Ebitda loss of £31.4 million, up from £19.3 million in 2013 as it struggles through an overhaul of its business model, ditching big upfront license fees in favour of a subscription-based system.

The firm has also recently formed a close relationship with IBM to help it substantially grow its user-base and revamped its leadership, bringing in former Visa executive Elizabeth Buse to act as co-CEO alongside founder Alastair Lukies.

In a statement reacting to the Visa news, Monitise reiterates its expectation to finally be Ebitda profitable in full year 2016, but shares still fell 10.88 pence, or 25.5%, to 31.63 pence in mid-morning trading.

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Comments: (1)

A Finextra member 

Visa invsted in Monetise because it was nimble and innovative...then it became the Visa graveyard wih every former exec joining, making it a mini-Visa and no doubt drowning in process and powerpoint. Furthermore, some of Luke's comments are a little worrying. At a Visa marketing meeting in 2012, he said "I dont expect Groupon to be around this time next year"..perhaps he should have looked in the mirror. I guess it's just a matter of time before it's sold to someone. Shame, because the concept was rather clebver but ten years to deliver isn't.

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