DigiCut IPO: My Biased Opinion

Well, if you follow me closely, you will know that I sometimes tweet about UT Bank and how the listing of it had some question marks. I used to call UT the pipeline to suck money from the system to clean up the books of the bigger company.

I am very much happy that companies are beginning to see the GAX as an alternative source of income. Kudos Groupe Nduom.

I am very reluctant to comment on IPOs in Ghana because they are just so bad that nothing really good comes out. They are either priced higher than normal or designed for other unproductive objectives.

With this in mind, let me try to comment on DigiCut IPO.

My first issue is the purpose for the IPO. The table below shows it all.

It is not exciting that 41.90% of the money raised will be channelled into loan payments. Majority of it is to clean up the books of GN Bank – another subsidiary of Groupe Nduom.

Another worrying issue is the board. Their backgrounds and ages. Not to discriminate but how innovative can they be in this digicut-world.

I think the board is just made of friends or investors of Groupe Nduom.

My opinions as I said earlier are a little biased. Just that if you are thinking of really long term investment, like 15-20years.. you can bet on DigiCut.

Finally, I understand DigiCut is paying dividend or paid dividend for 2017 as year of not paying a single penny. So the question is, why pay dividend when you have so much debt to cover. Or was it just a strategy to entice potential investors to buy into the IPO?

Hmmm. Could it be a UT-Bank-Style or the Real-Deal? Time will tell.

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