The Athletic - crypto in sports business, NFT collectibles & NFT ticketing

https://theathletic.com/2484646/2021/03/30/bitcoin-crypto-nfts-ethereum-sports-business/?article_source=search&search_query=bitcoin%20ethereum

Intresting extracts due to a (soft) paywall

NFT tickets

Dallas Mavericks owner Mark Cuban is a tech billionaire who is all-in on blockchain and NFTs. He doesn’t, however, place much significance on whether or not fans will shift from traditional cash to cryptocurrencies like Bitcoin or Dogecoin. Instead, he’s more interested in the wider business applications of all the technology.

“Everything is on the table. But I think the least important is using crypto as a currency. There are already gateways that enable that, so it’s simple for anyone to add,” Cuban said.

An NBA team owner/co-owner committee was recently formed to study blockchain technology and it includes Cuban, Ted Leonsis (Wizards), Joe Tsai (Nets), Steve Pagliuca (Celtics), Vivek Ranadive (Kings) and Ryan Sweeney (Jazz). All come from tech or finance backgrounds, indicative of a common denominator for sports team owners in the modern age.

One area that team owners are expected to try to apply blockchain is ticketing. Most entry into sports events now is done via digital applications rather than paper tickets, for both front-end retail sales and for the resale market. Putting tickets on blockchain theoretically allows teams and leagues to get a slice of secondary market sales when a buyer sells their ticket to someone else.

Leonsis made the case for blockchain-based ticket tracking in a recent call with The Athletic. He posed the example of a fan reselling a $150 face-value season ticket for $1,000.

“You made $850 and I didn’t share, the player didn’t share, the league didn’t share,” said Leonsis, a former AOL executive who also owns the WNBA’s Washington Mystics and NHL’s Washington Capitals.

He also said he’s interested in the technology to expand the global footprint for his teams beyond their local markets.

“I’m really interested in how to get out of the notion that I own a sports team and I have local media rights and a local market and I’m only as good as the size of my market. That to me is what is so interesting here,” Leonsis said. “There are eight billion people on the planet; six billion connected to high-speed internet; 500 million with interest in basketball. I have the Washington Capitals and I have 20,000 seats that I can sell to people 41 times a season. My market seems finite. A global market seems infinite.”

He theorized that could include selling NFT tickets to fans who’ll never attend a game in person but are willing to pay for digital keepsakes.

“A buyer can hold onto the memory, then resell the ticket,” he said. “I can sell a ticket to eight billion people. Previously, I could sell a ticket to 800,000 or 10 million, whatever is in your market. When people start to wrap their heads around this, it will be astounding the sea change this represents.”

​

NFT collectibles & NBA topshots

It also could apply to merchandise and apparel sales that traditionally have been physical if enough fans are interested in buying virtual items.

“When we reveal a new jersey and it sells for $300, people can buy it online or in the arena. But if it becomes a collectible globally, that could be a much bigger business,” Leonsis said.

He likened the blockchain, crypto and NFT trends to the mid-1990s internet explosion. There is a lot of money to be made, he said, and that’s important to him because he estimates the pandemic effects on his business will take three years from which to recover financially.

“It feels to me like when we first got people in America online and the internet became open via the Netscape browser in ’94 and the world was your oyster in terms of innovation and creating new apps,” Leonsis said. “We see (blockchain) as a profound move from analog to digital, from unaccountable to transparent. From a way to know who is buying and to turn episodic revenue into reoccurring revenue. That’s a long and subtler story in building value.”

And speaking of value, he said NBA Top Shot as a business could be worth more than most NBA teams — thanks, in part, to the league’s backing of the NFT technology to help fuel a boom.

“It’s possible that Dapper Labs is now one of the 10 most valuable NBA teams,” Leonsis said. “It’s stood behind, it’s trustworthy and the marketplace is real. They have that magic right now.”

He did express some skepticism over some NFT efforts and acknowledged that the new technology will not be a windfall for everyone. That said, the underlying blockchain tech is here to stay, he said, and the winners will be those that are patient as markets sort themselves out.

“There is going to be some losses, some companies that don’t make it, people will lose money. That’s what happens,” Leonsis said. “A few people make money who are in early and it disappoints other people. Not everyone is going to be a winner in this short period of time.

“This isn’t just about the LeBron card trading up, the Jordan rookie card selling for $700,000. This is much, much bigger and I believe will be looked at as the birth of this next generation of value creation for many businesses but especially sports and teams and leagues,” Leonsis said.

“No one knows how the movie is going to end. It’s just starting. These are like coming attractions. I’m sending out the warning signals — don’t get overwhelmed by the theater, the noise being generated.”

Paysafe goes public with new ticker: PSFE

Paysafe has finally just gone public with a new Board of Directors, much less debt, lots more cash, new M&A plans and a new ticker: PSFE During yesterday's ticker change, there were several reports of people having no access to their accounts and/or suddenly being faced with an abrupt change in margin requirements from 25% to 100%. This may have created a good buying opportunity. For those interested, here's some comprehensive DD.

Paysafe is a unique combination of fintech, crypto, iGaming, sports betting and banking all rolled into one stock. Whether you like him or not, this is essentially why NBC’s Jim Cramer recently said, “There is something about Paysafe that may be the ultimate stock for this moment.” (video link below) Market analyst Steve Grasso says, “It’s the most excited I’ve been about a stock in a long time.” Grasso, by the way, has repeated called for it to triple ($45-50). So why is that?

Paysafe offers a scalable electronic payment platform used by Draftkings, Roblox, Spotify, eToro, Fortnight, Coinbase, Amazon, Twitch, EA, 888, ApplePay, Youtube, Visa, Microsoft, Xbox, Amelco, William Hill, Ceasar's, Betfair, Pokerstars, PayLease, ESL Gaming, Luckbox, bet365, Lotto among many others.

Paysafe is ranked No. 2 globally in the digital wallet space with presence in 120 countries and No. 4 globally in integrated merchant processing.

Importantly, Paysafe is the No. 1 global leader in iGaming eCash network (currently 36% of revenue) with 10-15X growth projected. US iGaming continues to be legalized state by state, growing revenue by 234% in just the last year. “At Paysafe, the iGaming market volume was estimated to be $3.4 billion in 2019, and is now projected to reach $47 billion in 2025.”

Paysafe is enabled for crypto-to-crypto trading (Bitcoin and 26 other crypto-currencies) without having to go through fiat. It recently partnered with Coinbase to expand crypto options in US and it just launched PaysafeCash in US. (Now in 40 currencies and 30 global markets enabling easier cross border payments.)

Perhaps most central to this recent merger is Bill Foley, Fidelity’s Chairman of the Board and now the Chairman of Paysafe, who has a proven track record for generating exponential synergistic inorganic growth. For example, in just the last five years, he grew Ceridian 3.3X ($4.2B to $14B), Dun & Bradstreet 5.6X ($2B to $11.3B), and Black Knight 8.7X ($1.6B to $14B). He also grew FIS from $2.5 billion to over $91 billion (36.4X) and he says, “Those characteristics of FIS are right in line with what we plan on doing with Paysafe.”

Of their expansion plans Foley says, “We’ve got a wide landscape we can attack. It’s pretty exciting.” “It’s going to be a land grab. We want to be out there about 10 miles ahead of everybody else.” “I have a vision that we should be THE digital wallet and have tie-ins with every major casino company that’s headquartered or located in Las Vegas. There will be money to be made for everybody. That’s why I got so excited about Paysafe Group Holdings Limited as its position in iGaming is really second to none.” “Whether it’s a lottery or slot machines or sportsbetting opening in a state, it’s our job to be there first and to make sure we dominate. We’re focusing on gaming, particularly sportsbetting, in the United States as it becomes legal and we’ve got a wide landscape we can attack. It’s pretty exciting.”

Along with Bill Foley, Paysafe's newly announced Board of Directors includes a former Morgan Stanley CEO, a former Chairman of the American Gaming Association and CEO of MGM Resorts International, a legal and regulatory expert in the multi-jurisdictional online and retail gambling industries, the CEO of Dun & Bradstreet and CEO of Black Knight, two senior Managing Directors from Blackstone and two senior Managing Directors from CVC,

Between the new Board of Directors, Bill Foley’s proven expertise in rapid M&A growth and Paysafe’s massive market share and diverse assets, including the world’s second largest digital wallet, $362 million in free cash flow, 30-35% margins (21% CAGR), a projected $100-110 billion in transactional volume and $1.5 billion revenue, it is inevitable that institutional investors will, by necessity, include PSFE in their portfolios.

Paysafe’s industry leading risk management and international regulatory expertise gives them an edge in spaces where competitors have hesitated like iGaming, sportsbetting, crypto trading as well as offering essential banking and ecommerce services to the "unbanked" (1.7 billion globally). Paysafe has a global platform with integrated cloud technology (Snowflake) allowing for easier migration of eCash, integration of payment methods and expansion into global banking as a service. Paysafe is so diversified that they've identified a $58 trillion TAM.

Further, major investment funds know that fintechs are the future. Fund manager Cathie Wood says, “Fintechs are going to, we believe, gut banks.” Similarly, Jackie Reses, board member of the SF Federal Reserve and fmr Head of Square Capital, calls for fintech “taking over and revolutionizing banking” representing “a wholesale transition” of a $16 trillion market cap.

Analyst Michael Del Grosso recently initiated coverage saying, "We believe PSFE represents a relatively scarce asset within the payments industry given its unique business strategy, geographical footprint, and focus on the iGaming industry. Our forecasts imply revenue growth at the high-end of management's guidance and we believe there is upside to our forecasts in the event of state-level legalization of iGaming. PSFE operates in high-growth verticals, has a unique advantage in its consumer and merchant facing solutions, and offers exposure to a secular growth opportunity in the potential legalization of iGaming in the United States."

Investors should be aware that there is are post-merger lockup periods before insiders can sell their shares: PIPE: = 176 days. Private Equity = 86 days (roughly 6 and 3 months respectively accounting for trading days and weekends). Something to be aware of but there are several signals that these parties aren't in any rush to sell. Eli Nagler, a Senior Managing Director at Blackstone, recently said: “Today is a significant milestone for Paysafe and a testament to the excellent work of their world-class management team over several years. We believe Paysafe has a long runway for further growth and look forward to remaining part of the team and seeing their continued success as a public company.” Regarding Blackstone and CVC, who now have four senior managing directors on Paysafe’s Board, Foley said, “They rolled a significant amount of their investment which is a confidence builder. They didn’t take all their money off the table… All of these things put together really created the confidence among the investor base to invest in the PIPE and then support the stock.” Also, the PIPE investors are primarily insurance companies known for long term hold strategies and they are closely associated with Bill Foley. As Foley recently said, “Having a large PIPE basically validates the transaction.… The companies that I’m affiliated with actually invested roughly a billion dollars in the PIPE and forward purchase agreements so Paysafe was always a really protected asset, besides the fact that it’s a great asset.”

Bill Foley says Paysafe may be his “best investment ever.” He says, “It’s a fortress. It’s got a moat.” “We have a proven strategy of winning as new global markets open. And most importantly, we have unrivaled regulatory risk and technical expertise.”

As an aside, even though, “Roughly 75% of online gambling operators use Paysafe for processing payments” many in the US haven’t yet heard of it yet. Partially because much of its presence is in back-end processing. Through its several new partnerships (Coinbase, Microsoft Rentmoola), Paysafe is just now rolling out its offerings in the U.S. In Europe, where it is more commonly used, Trustpilot rates Paysafe as “Excellent” (4.7/5 stars) with over 20,000 reviews, and Skrill (owned by Paysafe) 4/5 stars “great” with over 16,000 reviews, while competitor PayPal is rated "poor" only 1/5 stars with over 16,000 reviews. Further, Paysafe was winner of the American Gambling Awards’ “Payment Processor of the Year,” and owns Openbucks, Neteller and Skrill, 2019 winner “Best Digital Wallet” for best consumer take up and most innovative technology with “greatest potential to disrupt current ecosystems.” Also, Paysafe won “Best Omni-Channel Payment Solution” 2021 MPE Award and the gaming industry SAGSE award for “Best Payment Method.”

To give a sense of their pace and progress, these are some of Paysafe’s recent announcements that were made before going public and have not been factored into the current valuation:

Dec. 15 — Paysafe launches Paysafecash in the US

Dec. 21 — Paysafe partners with Amelco to plug US sports books into unified payments platform

Dec. 23 — Paysafe enables online cash payments for Microsoft

Jan 11 — Paysafe partners with Colorado’s BetWildwood

Feb 1 — Paysafe expands Virginia Lottery partnership

Feb 17 — Paysafe partners with Luckbox to roll out Skrill and Neteller payment services

Feb 18 — Paysafe expands partnership with ESL Gaming, the world’s largest esports company

Feb 23 — Paysafe’s Skrill launches new fiat-to-crypto

Feb 25 — Paysafe partners with Austria’s A1 esports League

Mar 1 — Paysafe partners with RentMoola to enable US renters to pay rent with Paysafecash eCash

Mar 12 — Leeds United announces partnership with Skrill

Mar 15 — Paysafe expands U.S. partnership with PointsBet

Mar 16 — Paysafe partners with Provema to enable online cash payments

Mar 25 -- Paysafe’s Skrill expands crypto offering to US with Coinbase

​

Fortunately for shareholders, even before Foley’s value creation play book is put into action, Paysafe is currently undervalued compared to sector peers.

Since market analyst Steve Grasso continues to his repeat his calls for a triple ($45-50), I've looked more closely at EV / EBITDA, EV / Revenue and EV / Free cash flow multiples of sector peers, including PayPal, Nuvei, Repay, Shift 4, Adyen, Square, Affirm, Stripe, Chime and a few others, using cross-referenced data from Nasdaq, WSJ, Morningstar, Macrotrends, Yahoo Finance. The conservative average of those three multiples puts Paysafe’s post-merger pro forma share value at around $46.52:

​

Paysafe’s share price using the average multiples from the full list of sector peers:

EV/EBITDA ratio : $122.09

EV/Rev ratio : $83.91

EV/FCF ratio : $87.86

Average: $97.95

​

More realistic share prices, after eliminating all outliers with very high multiples:

EV/EBITDA ratio :$50.75

EV/Rev ratio : $44.64

EV/FCF ratio : $44.18

Average :$46.52

​

Note: Unlike Paysafe, nearly half of these publicly traded fintechs still do not report positive cash flow. Also, these multiples reflect a collective 27% pull back from recent highs so interest rate risks have been somewhat factored in.

Also, Paysafe's CFO noted that their conservative 11% growth projection is tied to the general fintech market at large. They have deliberately excluded both M&A plans that are apparently already underway and US iGaming growth that may potentially grow 10x or more over the next 5 years. Further, the above comps include fintechs with slower or similar growth while still commanding much higher multiples. For example, Shift4 reported only 4% y-o-y growth and GPN's growth projection is on par with Paysafe's.

Paysafe goes public with new ticker: PSFE

“Roughly 75% of online gambling operators use Paysafe for processing payments”

Paysafe has finally just gone public with a new Board of Directors, much less debt, lots more cash, new M&A plans and a new ticker: PSFE During yesterday's ticker change, there were several reports of people having no access to their accounts and/or suddenly being faced with an abrupt change in margin requirements from 25% to 100%. This may have created a good buying opportunity. For those interested, here's some comprehensive DD.

Paysafe is a unique combination of fintech, crypto, iGaming, sports betting and banking all rolled into one stock. Whether you like him or not, this is essentially why NBC’s Jim Cramer recently said, “There is something about Paysafe that may be the ultimate stock for this moment.” (video link below) Market analyst Steve Grasso says, “It’s the most excited I’ve been about a stock in a long time.” Grasso, by the way, has repeated called for it to triple ($45-50). So why is that?

Paysafe offers a scalable electronic payment platform used by Draftkings, Roblox, Spotify, eToro, Fortnight, Coinbase, Amazon, Twitch, EA, 888, ApplePay, Youtube, Visa, Microsoft, Xbox, Amelco, William Hill, Ceasar's, Betfair, Pokerstars, PayLease, ESL Gaming, Luckbox, bet365, Lotto among many others.

Paysafe is ranked No. 2 globally in the digital wallet space with presence in 120 countries and No. 4 globally in integrated merchant processing.

Importantly, Paysafe is the No. 1 global leader in iGaming eCash network (currently 36% of revenue) with 10-15X growth projected. US iGaming continues to be legalized state by state, growing revenue by 234% in just the last year. “At Paysafe, the iGaming market volume was estimated to be $3.4 billion in 2019, and is now projected to reach $47 billion in 2025.”

Paysafe is enabled for crypto-to-crypto trading (Bitcoin and 26 other crypto-currencies) without having to go through fiat. It recently partnered with Coinbase to expand crypto options in US and it just launched PaysafeCash in US. (Now in 40 currencies and 30 global markets enabling easier cross border payments.)

Perhaps most central to this recent merger is Bill Foley, Fidelity’s Chairman of the Board and now the Chairman of Paysafe, who has a proven track record for generating exponential synergistic inorganic growth. For example, in just the last five years, he grew Ceridian 3.3X ($4.2B to $14B), Dun & Bradstreet 5.6X ($2B to $11.3B), and Black Knight 8.7X ($1.6B to $14B). He also grew FIS from $2.5 billion to over $91 billion (36.4X) and he says, “Those characteristics of FIS are right in line with what we plan on doing with Paysafe.”

Of their expansion plans Foley says, “We’ve got a wide landscape we can attack. It’s pretty exciting.” “It’s going to be a land grab. We want to be out there about 10 miles ahead of everybody else.” “I have a vision that we should be THE digital wallet and have tie-ins with every major casino company that’s headquartered or located in Las Vegas. There will be money to be made for everybody. That’s why I got so excited about Paysafe Group Holdings Limited as its position in iGaming is really second to none.” “Whether it’s a lottery or slot machines or sportsbetting opening in a state, it’s our job to be there first and to make sure we dominate. We’re focusing on gaming, particularly sportsbetting, in the United States as it becomes legal and we’ve got a wide landscape we can attack. It’s pretty exciting.”

Along with Bill Foley, Paysafe's newly announced Board of Directors includes a former Morgan Stanley CEO, a former Chairman of the American Gaming Association and CEO of MGM Resorts International, a legal and regulatory expert in the multi-jurisdictional online and retail gambling industries, the CEO of Dun & Bradstreet and CEO of Black Knight, two senior Managing Directors from Blackstone and two senior Managing Directors from CVC,

Between the new Board of Directors, Bill Foley’s proven expertise in rapid M&A growth and Paysafe’s massive market share and diverse assets, including the world’s second largest digital wallet, $362 million in free cash flow, 30-35% margins (21% CAGR), a projected $100-110 billion in transactional volume and $1.5 billion revenue, it is inevitable that institutional investors will, by necessity, include PSFE in their portfolios.

Paysafe’s industry leading risk management and international regulatory expertise gives them an edge in spaces where competitors have hesitated like iGaming, sportsbetting, crypto trading as well as offering essential banking and ecommerce services to the "unbanked" (1.7 billion globally). Paysafe has a global platform with integrated cloud technology (Snowflake) allowing for easier migration of eCash, integration of payment methods and expansion into global banking as a service. Paysafe is so diversified that they've identified a $58 trillion TAM.

Further, major investment funds know that fintechs are the future. Fund manager Cathie Wood says, “Fintechs are going to, we believe, gut banks.” Similarly, Jackie Reses, board member of the SF Federal Reserve and fmr Head of Square Capital, calls for fintech “taking over and revolutionizing banking” representing “a wholesale transition” of a $16 trillion market cap.

Analyst Michael Del Grosso recently initiated coverage saying, "We believe PSFE represents a relatively scarce asset within the payments industry given its unique business strategy, geographical footprint, and focus on the iGaming industry. Our forecasts imply revenue growth at the high-end of management's guidance and we believe there is upside to our forecasts in the event of state-level legalization of iGaming. PSFE operates in high-growth verticals, has a unique advantage in its consumer and merchant facing solutions, and offers exposure to a secular growth opportunity in the potential legalization of iGaming in the United States."

Investors should be aware that there is are post-merger lockup periods before insiders can sell their shares: PIPE: = 176 days. Private Equity = 86 days (roughly 6 and 3 months respectively accounting for trading days and weekends). Something to be aware of but there are several signals that these parties aren't in any rush to sell. Eli Nagler, a Senior Managing Director at Blackstone, recently said: “Today is a significant milestone for Paysafe and a testament to the excellent work of their world-class management team over several years. We believe Paysafe has a long runway for further growth and look forward to remaining part of the team and seeing their continued success as a public company.” Regarding Blackstone and CVC, who now have four senior managing directors on Paysafe’s Board, Foley said, “They rolled a significant amount of their investment which is a confidence builder. They didn’t take all their money off the table… All of these things put together really created the confidence among the investor base to invest in the PIPE and then support the stock.” Also, the PIPE investors are primarily insurance companies known for long term hold strategies and they are closely associated with Bill Foley. As Foley recently said, “Having a large PIPE basically validates the transaction.… The companies that I’m affiliated with actually invested roughly a billion dollars in the PIPE and forward purchase agreements so Paysafe was always a really protected asset, besides the fact that it’s a great asset.”

Bill Foley says Paysafe may be his “best investment ever.” He says, “It’s a fortress. It’s got a moat.” “We have a proven strategy of winning as new global markets open. And most importantly, we have unrivaled regulatory risk and technical expertise.”

As an aside, even though, “Roughly 75% of online gambling operators use Paysafe for processing payments” many in the US haven’t yet heard of it yet. Partially because much of its presence is in back-end processing. Through its several new partnerships (Coinbase, Microsoft Rentmoola), Paysafe is just now rolling out its offerings in the U.S. In Europe, where it is more commonly used, Trustpilot rates Paysafe as “Excellent” (4.7/5 stars) with over 20,000 reviews, and Skrill (owned by Paysafe) 4/5 stars “great” with over 16,000 reviews, while competitor PayPal is rated "poor" only 1/5 stars with over 16,000 reviews. Further, Paysafe was winner of the American Gambling Awards’ “Payment Processor of the Year,” and owns Openbucks, Neteller and Skrill, 2019 winner “Best Digital Wallet” for best consumer take up and most innovative technology with “greatest potential to disrupt current ecosystems.” Also, Paysafe won “Best Omni-Channel Payment Solution” 2021 MPE Award and the gaming industry SAGSE award for “Best Payment Method.”

To give a sense of their pace and progress, these are some of Paysafe’s recent announcements that were made before going public and have not been factored into the current valuation:

Dec. 15 — Paysafe launches Paysafecash in the US

Dec. 21 — Paysafe partners with Amelco to plug US sports books into unified payments platform

Dec. 23 — Paysafe enables online cash payments for Microsoft

Jan 11 — Paysafe partners with Colorado’s BetWildwood

Feb 1 — Paysafe expands Virginia Lottery partnership

Feb 17 — Paysafe partners with Luckbox to roll out Skrill and Neteller payment services

Feb 18 — Paysafe expands partnership with ESL Gaming, the world’s largest esports company

Feb 23 — Paysafe’s Skrill launches new fiat-to-crypto

Feb 25 — Paysafe partners with Austria’s A1 esports League

Mar 1 — Paysafe partners with RentMoola to enable US renters to pay rent with Paysafecash eCash

Mar 12 — Leeds United announces partnership with Skrill

Mar 15 — Paysafe expands U.S. partnership with PointsBet

Mar 16 — Paysafe partners with Provema to enable online cash payments

Mar 25 -- Paysafe’s Skrill expands crypto offering to US with Coinbase

​

Fortunately for shareholders, even before Foley’s value creation play book is put into action, Paysafe is currently undervalued compared to sector peers.

Since market analyst Steve Grasso continues to his repeat his calls for a triple ($45-50), I've looked more closely at EV / EBITDA, EV / Revenue and EV / Free cash flow multiples of sector peers, including PayPal, Nuvei, Repay, Shift 4, Adyen, Square, Affirm, Stripe, Chime and a few others, using cross-referenced data from Nasdaq, WSJ, Morningstar, Macrotrends, Yahoo Finance. The conservative average of those three multiples puts Paysafe’s post-merger pro forma share value at around $46.52:

​

Paysafe’s share price using the average multiples from the full list of sector peers:

EV/EBITDA ratio : $122.09

EV/Rev ratio : $83.91

EV/FCF ratio : $87.86

Average: $97.95

​

More realistic share prices, after eliminating all outliers with very high multiples:

EV/EBITDA ratio :$50.75

EV/Rev ratio : $44.64

EV/FCF ratio : $44.18

Average :$46.52

​

Note: Unlike Paysafe, nearly half of these publicly traded fintechs still do not report positive cash flow. Also, these multiples reflect a collective 27% pull back from recent highs so interest rate risks have been somewhat factored in.

Also, Paysafe's CFO noted that their conservative 11% growth projection is tied to the general fintech market at large. They have deliberately excluded both M&A plans that are apparently already underway and US iGaming growth that may potentially grow 10x or more over the next 5 years. Further, the above comps include fintechs with slower or similar growth while still commanding much higher multiples. For example, Shift4 reported only 4% y-o-y growth and GPN's growth projection is on par with Paysafe's.

Paysafe goes public with new ticker: PSFE

Paysafe has finally just gone public with a new Board of Directors, much less debt, lots more cash, new M&A plans and a new ticker: PSFE During yesterday's ticker change, there were several reports of people having no access to their accounts and/or suddenly being faced with an abrupt change in margin requirements from 25% to 100%. This may have created a good buying opportunity. For those interested, here's some comprehensive DD.

Paysafe is a unique combination of fintech, crypto, iGaming, sports betting and banking all rolled into one stock. Whether you like him or not, this is essentially why NBC’s Jim Cramer recently said, “There is something about Paysafe that may be the ultimate stock for this moment.” (video link below) Market analyst Steve Grasso says, “It’s the most excited I’ve been about a stock in a long time.” Grasso, by the way, has repeated called for it to triple ($45-50). So why is that?

Paysafe offers a scalable electronic payment platform used by Draftkings, Roblox, Spotify, eToro, Fortnight, Coinbase, Amazon, Twitch, EA, 888, ApplePay, Youtube, Visa, Microsoft, Xbox, Amelco, William Hill, Ceasar's, Betfair, Pokerstars, PayLease, ESL Gaming, Luckbox, bet365, Lotto among many others.

Paysafe is ranked No. 2 globally in the digital wallet space with presence in 120 countries and No. 4 globally in integrated merchant processing.

Importantly, Paysafe is the No. 1 global leader in iGaming eCash network (currently 36% of revenue) with 10-15X growth projected. US iGaming continues to be legalized state by state, growing revenue by 234% in just the last year. “At Paysafe, the iGaming market volume was estimated to be $3.4 billion in 2019, and is now projected to reach $47 billion in 2025.”

Paysafe is enabled for crypto-to-crypto trading (Bitcoin and 26 other crypto-currencies) without having to go through fiat. It recently partnered with Coinbase to expand crypto options in US and it just launched PaysafeCash in US. (Now in 40 currencies and 30 global markets enabling easier cross border payments.)

Perhaps most central to this recent merger is Bill Foley, Fidelity’s Chairman of the Board and now the Chairman of Paysafe, who has a proven track record for generating exponential synergistic inorganic growth. For example, in just the last five years, he grew Ceridian 3.3X ($4.2B to $14B), Dun & Bradstreet 5.6X ($2B to $11.3B), and Black Knight 8.7X ($1.6B to $14B). He also grew FIS from $2.5 billion to over $91 billion (36.4X) and he says, “Those characteristics of FIS are right in line with what we plan on doing with Paysafe.”

Of their expansion plans Foley says, “We’ve got a wide landscape we can attack. It’s pretty exciting.” “It’s going to be a land grab. We want to be out there about 10 miles ahead of everybody else.” “I have a vision that we should be THE digital wallet and have tie-ins with every major casino company that’s headquartered or located in Las Vegas. There will be money to be made for everybody. That’s why I got so excited about Paysafe Group Holdings Limited as its position in iGaming is really second to none.” “Whether it’s a lottery or slot machines or sportsbetting opening in a state, it’s our job to be there first and to make sure we dominate. We’re focusing on gaming, particularly sportsbetting, in the United States as it becomes legal and we’ve got a wide landscape we can attack. It’s pretty exciting.”

Along with Bill Foley, Paysafe's newly announced Board of Directors includes a former Morgan Stanley CEO, a former Chairman of the American Gaming Association and CEO of MGM Resorts International, a legal and regulatory expert in the multi-jurisdictional online and retail gambling industries, the CEO of Dun & Bradstreet and CEO of Black Knight, two senior Managing Directors from Blackstone and two senior Managing Directors from CVC,

Between the new Board of Directors, Bill Foley’s proven expertise in rapid M&A growth and Paysafe’s massive market share and diverse assets, including the world’s second largest digital wallet, $362 million in free cash flow, 30-35% margins (21% CAGR), a projected $100-110 billion in transactional volume and $1.5 billion revenue, it is inevitable that institutional investors will, by necessity, include PSFE in their portfolios.

Paysafe’s industry leading risk management and international regulatory expertise gives them an edge in spaces where competitors have hesitated like iGaming, sportsbetting, crypto trading as well as offering essential banking and ecommerce services to the "unbanked" (1.7 billion globally). Paysafe has a global platform with integrated cloud technology (Snowflake) allowing for easier migration of eCash, integration of payment methods and expansion into global banking as a service. Paysafe is so diversified that they've identified a $58 trillion TAM.

Further, major investment funds know that fintechs are the future. Fund manager Cathie Wood says, “Fintechs are going to, we believe, gut banks.” Similarly, Jackie Reses, board member of the SF Federal Reserve and fmr Head of Square Capital, calls for fintech “taking over and revolutionizing banking” representing “a wholesale transition” of a $16 trillion market cap.

Analyst Michael Del Grosso recently initiated coverage saying, "We believe PSFE represents a relatively scarce asset within the payments industry given its unique business strategy, geographical footprint, and focus on the iGaming industry. Our forecasts imply revenue growth at the high-end of management's guidance and we believe there is upside to our forecasts in the event of state-level legalization of iGaming. PSFE operates in high-growth verticals, has a unique advantage in its consumer and merchant facing solutions, and offers exposure to a secular growth opportunity in the potential legalization of iGaming in the United States."

Investors should be aware that there is are post-merger lockup periods before insiders can sell their shares: PIPE: = 176 days. Private Equity = 86 days (roughly 6 and 3 months respectively accounting for trading days and weekends). Something to be aware of but there are several signals that these parties aren't in any rush to sell. Eli Nagler, a Senior Managing Director at Blackstone, recently said: “Today is a significant milestone for Paysafe and a testament to the excellent work of their world-class management team over several years. We believe Paysafe has a long runway for further growth and look forward to remaining part of the team and seeing their continued success as a public company.” Regarding Blackstone and CVC, who now have four senior managing directors on Paysafe’s Board, Foley said, “They rolled a significant amount of their investment which is a confidence builder. They didn’t take all their money off the table… All of these things put together really created the confidence among the investor base to invest in the PIPE and then support the stock.” Also, the PIPE investors are primarily insurance companies known for long term hold strategies and they are closely associated with Bill Foley. As Foley recently said, “Having a large PIPE basically validates the transaction.… The companies that I’m affiliated with actually invested roughly a billion dollars in the PIPE and forward purchase agreements so Paysafe was always a really protected asset, besides the fact that it’s a great asset.”

Bill Foley says Paysafe may be his “best investment ever.” He says, “It’s a fortress. It’s got a moat.” “We have a proven strategy of winning as new global markets open. And most importantly, we have unrivaled regulatory risk and technical expertise.”

As an aside, even though, “Roughly 75% of online gambling operators use Paysafe for processing payments” many in the US haven’t yet heard of it yet. Partially because much of its presence is in back-end processing. Through its several new partnerships (Coinbase, Microsoft Rentmoola), Paysafe is just now rolling out its offerings in the U.S. In Europe, where it is more commonly used, Trustpilot rates Paysafe as “Excellent” (4.7/5 stars) with over 20,000 reviews, and Skrill (owned by Paysafe) 4/5 stars “great” with over 16,000 reviews, while competitor PayPal is rated "poor" only 1/5 stars with over 16,000 reviews. Further, Paysafe was winner of the American Gambling Awards’ “Payment Processor of the Year,” and owns Openbucks, Neteller and Skrill, 2019 winner “Best Digital Wallet” for best consumer take up and most innovative technology with “greatest potential to disrupt current ecosystems.” Also, Paysafe won “Best Omni-Channel Payment Solution” 2021 MPE Award and the gaming industry SAGSE award for “Best Payment Method.”

To give a sense of their pace and progress, these are some of Paysafe’s recent announcements that were made before going public and have not been factored into the current valuation:

Dec. 15 — Paysafe launches Paysafecash in the US

Dec. 21 — Paysafe partners with Amelco to plug US sports books into unified payments platform

Dec. 23 — Paysafe enables online cash payments for Microsoft

Jan 11 — Paysafe partners with Colorado’s BetWildwood

Feb 1 — Paysafe expands Virginia Lottery partnership

Feb 17 — Paysafe partners with Luckbox to roll out Skrill and Neteller payment services

Feb 18 — Paysafe expands partnership with ESL Gaming, the world’s largest esports company

Feb 23 — Paysafe’s Skrill launches new fiat-to-crypto

Feb 25 — Paysafe partners with Austria’s A1 esports League

Mar 1 — Paysafe partners with RentMoola to enable US renters to pay rent with Paysafecash eCash

Mar 12 — Leeds United announces partnership with Skrill

Mar 15 — Paysafe expands U.S. partnership with PointsBet

Mar 16 — Paysafe partners with Provema to enable online cash payments

Mar 25 -- Paysafe’s Skrill expands crypto offering to US with Coinbase

​

Fortunately for shareholders, even before Foley’s value creation play book is put into action, Paysafe is currently undervalued compared to sector peers.

Since market analyst Steve Grasso continues to his repeat his calls for a triple ($45-50), I've looked more closely at EV / EBITDA, EV / Revenue and EV / Free cash flow multiples of sector peers, including PayPal, Nuvei, Repay, Shift 4, Adyen, Square, Affirm, Stripe, Chime and a few others, using cross-referenced data from Nasdaq, WSJ, Morningstar, Macrotrends, Yahoo Finance. The conservative average of those three multiples puts Paysafe’s post-merger pro forma share value at around $46.52:

​

Paysafe’s share price using the average multiples from the full list of sector peers:

EV/EBITDA ratio : $122.09

EV/Rev ratio : $83.91

EV/FCF ratio : $87.86

Average: $97.95

​

More realistic share prices, after eliminating all outliers with very high multiples:

EV/EBITDA ratio :$50.75

EV/Rev ratio : $44.64

EV/FCF ratio : $44.18

Average :$46.52

​

Note: Unlike Paysafe, nearly half of these publicly traded fintechs still do not report positive cash flow. Also, these multiples reflect a collective 27% pull back from recent highs so interest rate risks have been somewhat factored in.

Also, Paysafe's CFO noted that their conservative 11% growth projection is tied to the general fintech market at large. They have deliberately excluded both M&A plans that are apparently already underway and US iGaming growth that may potentially grow 10x or more over the next 5 years. Further, the above comps include fintechs with slower or similar growth while still commanding much higher multiples. For example, Shift4 reported only 4% y-o-y growth and GPN's growth projection is on par with Paysafe's.

https://www.youtube.com/watch?v=xBi9JyR5HyA

NAVCOIN BINANCE TRADING SEMINAR IN GHANA - High quality, self-paced interactive training session for NavCoin users, crypto enthusiasts and investors on how to use fiat (Ghana cedies) to trade NavCoin on binance.

1. Motivation

The NavCoin community is energetic and highly engaged, thanks to the core community’s concerted efforts and initiatives. The DAO recognizes that reaching new audiences and users is vital for NavCoin mass adoption. Based on that conclusion, this proposal is created to be dedicated to outreach. It seeks to deliver high quality, self-paced interactive training session for NavCoin users, crypto enthusiasts and investors in Ghana on how to use fiat (Ghana cedies) to trade NavCoin on binance.

The overall vision for this initiative is to educate, up-skill and build a strong groundwork for NavCoin adoption in Ghana and Africa at large, through a practical seminar that it is fully planned, staffed and low cost budgeted to engage all participants in learning how to conveniently trade NavCoin on bianace.

As a robust cryptocurrency, NavCoin needs a coherent education and awareness creation to ensure mass adoption by the general public and regional communities. It is obvious that, knowledge on the fiat on/off ramps for NavCoin is imperative for the use of the coin by all people across the globe. People need to know the various ways in which they can buy Nav with fiat or exchange Nav for fiat. With the recent addition of Mobile Money on the binance platform, users in Ghana can now deposit fiat, exchange it for BTC and easily trade it for Nav.

This knowledge needs to be communicated to the general public, especially cryptocurrency enthusiasts that have been looking for avenues to on-ramp or off-ramp fiat for Nav. The community needs an ample educative initiative to jumpstart this information to the public hence the need for this proposal.

2. Why Ghana?

Ghana is one of the nations in Africa that is much involved in cryptocurrency. Though, much more have to be done to create awareness, as adoption is still very low among the populace. NavCoin has a critical role to play in the Ghanaian economy, with over $3 billion in Ghana’s annual remittances, Ghana's impressive economic growth, especially in cross-border payments for manufacturing exports, the high rate of informality, and the entrepreneurial mindset of its people and the decreasing purchasing power of the Ghanaian minimum wage.

NAV is on a growth-path that can help solve the fundamental problems of the existing monetary system, which Ghana is not fit for purpose. Ghanaians using traditional currencies are often faced with high transaction costs, inflation and currency devaluation, exorbitant interest rates and high levels of fraud. Coupled with all this - accessing the existing system (despite the fact that many have a mobile phone and conduct other elements of their lives online) is still incredibly restrictive. This has in turn led to a lack of financial inclusion and huge unbanked deposits in Ghana, which does not help the citizens and severely hampers economic growth and financial freedom in this region.

NAV can be a life changing for many millions of people in Ghana. For the unbanked and those that lose out every time they deal with the existing financial services sector, here lies ahead a better way of moving, storing and exchanging value. I believe events of this nature will bring NAV at the forefront of bringing this inevitable change to Ghana and Africa as a whole in a responsible way.

3. Why Vote Yes

Mass Education: at least, 100 people, including crypto enthusiasts, traders, entrepreneurs etc. are to be trained on the practical usage of NavCoin. This is a rational business-to-consumer based awareness creation for the NavCoin community.

Adoption in emerging economy: the conference location is a perfect environment for NavCoin adoption to flourish. This training is needed to enable a NavCoin-only economy in an emerging economy looking for alternative payment solutions to adopt.

Effective Marketing: Education-based marketing is probably the most effective method to advertise a new product in any setting. The event will directly imbibe attention of newbies that are yet to begin their cryptocurrency journey with the name and usage of NavCoin.

Low Cost: The amount requested to organize this event is reasonable, considering the returns this will gain for NavCoin. This budget represents just a minor fraction of the community treasury but delivering a key objective of the community: NavCoin adoption.

Value materials: training files will be made available to the NavCoin community to adopt and use - adding value to NavCoin education and all related projects. Exclusively for NAVCOIN.

4. Modules of seminar

· Introduction to cryptocurrency and blockchain

· Keynote speech on NavCoin

· Trading NavCoin on binance.com with fiat and Bitcoin

· NavCoin for Businesses

· NavCoin wallets and staking

· Buying NavCoin on other exchanges

This practical training for participants will make them feel the speed and convenience with NavCoin. Participants will therefore be encouraged to purchase the coin as a store of value and to realize their businesses and future entrepreneurial goals, etc.

5. ROI for the NavCoin community

I hope to expand and maintain the NavCoin community with this event. Through this event, NAV will get a lot of coverage and usage in Ghana - many people will now be to have NAV as their first real cryptocurrency experience. This event delivers on multiple levels: Hands-on experience with NavCoin and binance trading, organic marketing that draws new people into the ecosystem and providing an important education to new/existing NAV users in Ghana.

My team is solid and we have previous experience in this field. We’ve gained a lot of experience and contacts during the time we’ve been working for the NAV community. We will implement an action plan that is cost-effective, self-sufficient and with the ability to meet all requirements in time.

6. Success criteria

To justify the success of the event, we shall be uploading reports, pictures, videos and other relevant outcome to the NavCoin discord server which will validate the amount of work been done.

7. Budget for the targeted participants = 5000Nav

8. About Me

I am Fuseini Alhassan (cryptoeye) NavCoin ambassador to Africa (Ghana) I am a long term community activist who organized the first official NavCoin meetup in 2019. I have also partnered with crypto travelers in spreading the message of crypto currencies across Ghana and Africa at large. My current proposal aims at training people on how to use and trade NavCoin with local currency on binance exchange.

https://www.reddit.com/r/NavCoin/comments/cltmpb/NavCoin_meetup_in_the_upper_east_region_of_ghana/

Bitcoin Record Highs and the New Booming Business of NFTS

https://www.fanspel.com/

Two Important Events Happened In The Past Few Days In The Cryptocurrency World; Bitcoin Rose To A New Record High Of $60,000 And An NFT Sold For $69 Million. The Steady Rise Of Bitcoin And Other Cryptocurrencies Isn’t As Shocking As The First Days It Made Headlines For Its Unbridled Jump. 

In Its Early Days, Bitcoin Had Been Dismissed As A Fad, A Craze That Would Wear Off Eventually Like Any New Recreational Drug In The Market. But Cryptocurrency And Blockchain Technology Has Reinforced The Power Of Tech When It’s Allowed To Run Free And Wild. 

Crypto’s New Frontier Is In The NFTs Or “Non-Fungible Tokens”. NFTs Rolled Into New Milestones With The Sale Of A Digital Art By An Artist Known As Beeple Whose Real Name Is Mike Winklemann For An Equivalent Of $69.3 Million. 

The Piece Of Art That Only Exists Digitally Was Sold By Christie Through An Auction That Had Indicated Early On They’d Be Accepting ETH Coins. The JPG Was Bought By An Anonymous Investor For 42,329.453 ETH Coins. 

THE BOOMING BUSINESS OF NFTS 

Even Before Anyone Starts Ransacking The Internet For What The Heck Happened Over The Weekend, There’s Some Truth We Need To Dissect. NFTs Or Non Fungible Tokens Are Unique Digital Files. In A Sense, They Can’t Be Copied Like Regular Digital Files.  

NFTs Exist On The Ethereum Blockchain But Separate From The ETH Coins. And Nothing Stops Other Blockchains From Setting Up NFTs, Some Like Bitcoin Cash Have Already Started. The Most Interesting Thing About This Is The Fact That Non-Fungible Tokens Are Powered Using Blockchain. 

Think Of Traditional Art With The Signature Identification Strokes Replicated On A Blockchain Platform. The Idea Is Sweet And Advantageous To The Artist, Buyer, Or Even Collector. The Non-Fungible Tokens Have Been Designed To Add Value To A Somewhat “Worthless” Piece Of Art. 

Some Of These Pieces Of Digital Artistry Can Only Be Shared Free, However, With Blockchain, They Are Worth Millions With The Latest Beeple Sale Solidifying Their Worth Further. 

Traditional Art Sellers Rely On Speculation And Rarity To Auction Value For Tens Or Even Hundreds Of Millions. The NFTs Digital Art Market Is No Exception, They Want To Capitalize On The Recent Sales To Boost This Market. 

The Beeple Has Made A Bold Statement And Skeptics Are Watching By The Sidelines While Enthusiasts Are Already Marking The Early Days Of The Digital Art Revolution. 

IS THE NFTS BOOM SUSTAINABLE?

The New Owner Of The “Everydays — The First 5000 Days” Piece Only Recognized By A Pseudonym Metakovan Bought It Using Cryptocurrency. He Has Only Been Collecting Art Since His Fund’s Metapurse Inception In 2016. He Hasn’t Sold Any Acquisitions Yet. In 2019, He Bought The First Digital Car For The Game F1 Delta Time For The Equivalent Of More Than $100,000. 

The Traditional Art Collection Has Been Sustained, Partially By A Barrage Of Old Money With Extra Millions To Spend. Cryptocurrencies Such As Bitcoin Are Producing Millionaires With Enough Money To Flex Their Financial Muscles. 

What Better Way To Do So Than Investing In A Booming NFTs Market? The Stakes In The Relatively New NFT Market Are Too High To Be Ignored. The Speculative-Fuelled Art Market Would Want To Sustain The Boom. 

They Are Probably Searching For The Next Best Digital Art Collectible That Would Bring Millions At An Auction. Mektovan Exclaimed That The Collection He Got Was Worth Even ETH Coin Spent Because It Is A Collection Of Digital Art Beeple Has Made Since 2007. 

We Can’t Predict The Future But From Recent Developments, NFTs Have A Bright Future. Just As The Skepticism Surrounding The Foundation Of Cryptocurrency Was Evident, This Too Is Expected With NFTs. 

With Bitcoins Minting New Millionaires At An Incredible Rate You Can Expect More Insane Sales Like This One. Artists Get An Opportunity To Reap From Their Creativity And Hard Work While Buyers And Collectors Get The Privilege Of Owning Rare Artistic Impressions. 

The Underlying Blockchain Framework Only Shows The Importance Of This Tech In Designing The Future. New Applications Keep Cropping Up From The Simple Ideology Of A Digital Currency To The Extensive World Of Art And Rarity With The Artist’s Signature Worth Much More. 

Paysafe ticker change complete: PSFE

Paysafe finally goes public with new Board of Directors, much less debt, lots more cash, new M&A plans and new ticker: PSFE

Paysafe offers a unique combination of fintech, crypto, iGaming, sports betting and banking all rolled into one stock. This is why NBC’s Cramer recently said, “There is something about Paysafe that may be the ultimate stock for this moment.” (Link below) And market analyst Steve Grasso says, “It’s the most excited I’ve been about a stock in a long time.” Grasso, by the way, has repeated called for it to triple ($45-50). So why is that?

Paysafe offers a scalable electronic payment platform used by Draftkings, Roblox, Spotify, eToro, Fortnight, Coinbase, Amazon, Twitch, EA, 888, ApplePay, Youtube, Visa, Microsoft, Xbox, Amelco, William Hill, Ceasar's, Betfair, Pokerstars, PayLease, ESL Gaming, Luckbox, bet365, Lotto among many others.

Paysafe is ranked No. 2 globally in the digital wallet space with presence in 120 countries and No. 4 globally in integrated merchant processing.

Importantly, Paysafe is the No. 1 global leader in iGaming eCash network (currently 36% of revenue) with 10-15X growth projected. US iGaming continues to be legalized state by state, growing revenue by 234% in just the last year. “At Paysafe, the iGaming market volume was estimated to be $3.4 billion in 2019, and is now projected to reach $47 billion in 2025.”

Paysafe is enabled for crypto-to-crypto trading (Bitcoin and 26 other crypto-currencies) without having to go through fiat. It recently partnered with Coinbase to expand crypto options in US and it just launched PaysafeCash in US. (Now in 40 currencies and 30 global markets enabling easier cross border payments.)

Perhaps most central to this recent merger is Bill Foley, Fidelity’s Chairman of the Board and now the Chairman of Paysafe, who has a proven track record for generating exponential synergistic growth. For example, in just the last five years, he grew Ceridian 3.3X ($4.2B to $14B), Dun & Bradstreet 5.6X ($2B to $11.3B), and Black Knight 8.7X ($1.6B to $14B). He also grew FIS from $2.5 billion to over $91 billion (36.4X) and he says, “Those characteristics of FIS are right in line with what we plan on doing with Paysafe.”

Of Paysafe's expansion plans Foley says, “We’ve got a wide landscape we can attack. It’s pretty exciting.” “It’s going to be a land grab. We want to be out there about 10 miles ahead of everybody else.” “I have a vision that we should be THE digital wallet and have tie-ins with every major casino company that’s headquartered or located in Las Vegas. There will be money to be made for everybody. That’s why I got so excited about Paysafe Group Holdings Limited as its position in iGaming is really second to none.” “Whether it’s a lottery or slot machines or sportsbetting opening in a state, it’s our job to be there first and to make sure we dominate. We’re focusing on gaming, particularly sportsbetting, in the United States as it becomes legal and we’ve got a wide landscape we can attack. It’s pretty exciting.”

Along with Bill Foley, Paysafe's newly announced Board of Directors includes a former Morgan Stanley CEO, a former Chairman of the American Gaming Association and CEO of MGM Resorts International, a legal and regulatory expert in the multi-jurisdictional online and retail gambling industries, two senior Managing Directors from Blackstone, two from CVC, the CEO of Dun & Bradstreet and CEO of Black Knight.

Between the new Board of Directors, Bill Foley’s proven expertise in rapid M&A growth and Paysafe’s massive market share and diverse assets, including the world’s second largest digital wallet, $362 million in free cash flow, 30-35% margins (21% CAGR), a projected $100-110 billion in transactional volume and $1.5 billion revenue, it is inevitable that institutional investors will, by necessity, include PSFE in their portfolios.

Paysafe’s industry leading risk management and international regulatory expertise gives them an edge in spaces where competitors have hesitated like iGaming, sportsbetting, crypto trading as well as offering essential banking and ecommerce services to the "unbanked" (1.7 billion globally). Paysafe has a global platform with integrated cloud technology (Snowflake) allowing for easier migration of eCash, integration of payment methods and expansion into global banking as a service. Paysafe is so diversified that they've identified a $58 trillion TAM.

Further, major investment funds know that fintechs are the future. Fund manager Cathie Wood says, “Fintechs are going to, we believe, gut banks.” Similarly, Jackie Reses, board member of the SF Federal Reserve and fmr Head of Square Capital, calls for fintech “taking over and revolutionizing banking” representing “a wholesale transition” of a $16 trillion market cap.

Analyst Michael Del Grosso recently initiated coverage saying, "We believe PSFE represents a relatively scarce asset within the payments industry given its unique business strategy, geographical footprint, and focus on the iGaming industry. Our forecasts imply revenue growth at the high-end of management's guidance and we believe there is upside to our forecasts in the event of state-level legalization of iGaming. PSFE operates in high-growth verticals, has a unique advantage in its consumer and merchant facing solutions, and offers exposure to a secular growth opportunity in the potential legalization of iGaming in the United States."

Investors should be aware there is are lockup periods before insiders can sell their shares after merger: PIPE: = 176 days. Private Equity = 86 days (roughly 6 and 3 months respectively accounting for trading days and weekends). There are several signals that these parties won’t be in any rush to sell. Eli Nagler, a Senior Managing Director at Blackstone, recently said: “Today is a significant milestone for Paysafe and a testament to the excellent work of their world-class management team over several years. We believe Paysafe has a long runway for further growth and look forward to remaining part of the team and seeing their continued success as a public company.” Regarding Blackstone and CVC, who now have four senior managing directors on Paysafe’s Board, Foley said, “They rolled a significant amount of their investment which is a confidence builder. They didn’t take all their money off the table…All of these things put together really created the confidence among the investor base to invest in the PIPE and then support the stock.” Also, the PIPE investors are primarily insurance companies known for long term hold strategies and they are closely associated with Bill Foley. As Foley recently said, “Having a large PIPE basically validates the transaction.… The companies that I’m affiliated with actually invested roughly a billion dollars in the PIPE and forward purchase agreements so Paysafe was always a really protected asset, besides the fact that it’s a great asset.”

As an aside, even though, “Roughly 75% of online gambling operators use Paysafe for processing payments” many in the US haven’t yet heard of it yet. Partially because much of its presence is in back-end processing. Through its several new partnerships, Paysafe is just now rolling out its offerings in the U.S. In Europe, where it is more commonly used, trustpilot rates Paysafe as “Excellent” (4.7/5 stars) with over 20,000 reviews, and Skrill (owned by Paysafe) 4/5 stars “great” with over 16,000 reviews, while competitor PayPal is rated "poor" only 1/5 stars over 16,000 reviews. Further, Paysafe was winner of the American Gambling Awards’ “Payment Processor of the Year,” and owns Openbucks, Neteller and Skrill, 2019 winner “Best Digital Wallet” for best consumer take up and most innovative technology with “greatest potential to disrupt current ecosystems.” Also, Paysafe won “Best Omni-Channel Payment Solution” 2021 MPE Award and the gaming industry SAGSE award for “Best Payment Method.”

To give a sense of their pace and progress, these are some of Paysafe’s recent announcements that were made before going public and have not been factored into the current valuation:

Dec. 15 — Paysafe launches Paysafecash in the US

Dec. 21 — Paysafe partners with Amelco to plug US sports books into unified payments platform

Dec. 23 — Paysafe enables online cash payments for Microsoft

Jan 11 — Paysafe partners with Colorado’s BetWildwood

Feb 1 — Paysafe expands Virginia Lottery partnership

Feb 17 — Paysafe partners with Luckbox to roll out Skrill and Neteller payment services

Feb 18 — Paysafe expands partnership with ESL Gaming, the world’s largest esports company

Feb 23 — Paysafe’s Skrill launches new fiat-to-crypto

Feb 25 — Paysafe partners with Austria’s A1 esports League

Mar 1 — Paysafe partners with RentMoola to enable US renters to pay rent with Paysafecash eCash

Mar 12 — Leeds United announces partnership with Skrill

Mar 15 — Paysafe expands U.S. partnership with PointsBet

Mar 16 — Paysafe partners with Provema to enable online cash payments

Mar 25 -- Paysafe’s Skrill expands crypto offering to US with Coinbase

​

Fortunately for shareholders, even before Foley’s value creation play book is put into action, Paysafe is undervalued compared to sector peers.

Since market analyst Steve Grasso continues to his repeat his calls for a triple ($45-50), I've looked more closely at EV / EBITDA, EV / Revenue and EV / Free cash flow multiples of fintech competitors, including PayPal, Nuvei, Repay, Shift 4, Adyen, Square, Affirm, Stripe, Chime and a few others, using cross-referenced data from Nasdaq, WSJ, Morningstar, Macrotrends, Yahoo Finance. The conservative average of those three multiples puts Paysafe’s post-merger pro forma share value at around $46.52:

Paysafe’s share price using the average multiples from the full list of sector peers:

EV/EBITDA ratio : $122.09

EV/Rev ratio : $83.91

EV/FCF ratio : $87.86

Average: $97.95

More realistic share prices, after eliminating all outliers with very high multiples:

EV/EBITDA ratio :$50.75

EV/Rev ratio : $44.64

EV/FCF ratio : $44.18

Average :$46.52

​

Note: Unlike Paysafe, nearly half of these publicly traded fintechs still do not report positive cash flow. Also, these multiples reflect a collective 27% pull back from highs so interest rate risks have been somewhat factored in.

Also, the Paysafe CFO noted that their conservative 11% growth projection is tied to the general fintech market at large. They have deliberately excluded both M&A plans that are apparently already underway and US iGaming growth that may potentially grow 10x over the next 5 years. Further, the above comps include fintechs with slower or similar growth while still commanding much higher multiples. For example, Fiserv projects 5% CAGR going forward. Similarly, Shift4 reported only 4% y-o-y growth and GPN's growth projection is on par with Paysafe's.