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Strategies & Market Trends : Value Investing

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To: gcrispin who wrote (28642)	10/21/2007 12:08:02 AM
From: Spekulatius	Read Replies (2) of 78702

WU - Even though WU has over 270,000 agents in over 200 countries, it only has a 15% market share in a fragmented market. I believe that it is consolidating its position by building partnerships with other technological threats to the money transfer business. With its $1 billion in annual operating cash flow the company will be able to reduce its $3.5 billion in debt and repurchase stock. The technological threat exists already. With Paypal, you can send money to 190 countries for very little fees. All you need is a bank account for the sender and an email address for both sender and received. Does sound to me as if the technological barrier amounts to a molehill. Cellphone could presumably even work without banking connection at all for both sender and receiver. Sure WU could offer this service as well but it is unlikely that they will be able to charger their fairly substantial fees in this space, IMO. There is also Walmart which is fairly ubiquitous in both US and Mexico and could make this a business. Again there would be no banking relationship needed whatsoever and WMT even could use this service as a loss leader to get people in it's stores.

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