Cashrewards IPO (Thoughts on Investment)

Anyone been following the news of Cashrewards upcoming IPO?

Given an assumed large majority of Ozbargain would be utilising Cashrewards, sound investment?

https://www.afr.com/street-talk/cashrewards-prices-ipo-at-5-...

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Comments

  • I would need to read the prospects and look at the finer details before a judgement can be made

  • My guess is that %'s will drop as investors will now want their slice of the pie.

  • More than half the time, it doesn't work for me.
    Unreliable technology (implementation) to begin with.

    • This is a concern for me, too. It's difficult to take it mainstream because it is complicated to use.

      Even for experienced users who go and disable all adblockers and remember to click through, you never know if it will be tracked.

      And then it isn't great for the industry when companies in this space get hacked and all their users start getting spammed online (as their personal data spreads over the internet), as is what happened with Shopback. Only followed by Shopback to disrespect users, completely ignore user queries etc.

      Although, cashrewards certainly seems better than them so far.

  • +2 votes

    What's the normal price?
    .

  • Think of your business model as:

    You have powerful suppliers: companies can turn off their discounts or dial it down (WW gift cards is one example)

    Your consumers: it is a website, you got other options like Shopback (lets not go moaning about the data breach) and all those that came before it.

    Competitors: what about overseas competitors that might march in or you might try to expand overseas and find your competitors have deeper pockets and you keep on pouring money into a black hole (remember Foodora)

    Barriers to entry: on the internet if you present enough of a carrot there is VCs that will fund it

    • Yeah.. cashrewards and shopback doesnt work for me half the time.. and the other half, theres so much rules and stipulation around the offer that I cant even use it anyway, like for Amazon AU for example.. a bunch of categories doesn't apply.

      It's seem so unstable. I also don't really see what the incentives are for big companies to make a deal with cashback businesses.

    • companies can turn off their discounts or dial it down

      This is the biggest factor for not investing. Too reliant on other businesses being generous. There's no friends in business. Ebay is a perfect example on how CRs customers can backflip in a flash.

    • Very valid point - doesn't matter ow many great brands are on the platform I would guess none of them are in a fixed term agreement and none of them have an obligation to remain on the platform tomorrow

      Ultimately these programs have very little control over their revenue - they don't own tracking, they don't own attribution, they don't own much in the way of 1P data and the only way they can dial up profit is to reduce give back rates to members which in turn drives less value for members and if it drives less value for members it drives less value for the merchants who were paying for those members to shop in the first place and then the whole thing falls over.

  • Recent IPOs:

    • Plenti - share price tanked on float, even though they had strong provision funds during COViD lockdown past 6 months and appear to be a safe platform.

    • ABB - share price doubled despite increasing plan cost and becoming less popular around ozbargainers

    I'm unsure how to read Cashrewards float performance.

    • I am actually not sure what happened with ABB and why it started trading earlier than expected. Again, I don't know all details and I am not qualified in this area but that seemed a bit fishy to me - many of the IPO participants were not able to sell shares on day one because of the earlier floating.

      • many of the IPO participants were not able to sell shares on day one because of the earlier floating.

        This is a common practice for turd stocks. It allows the VC and institutional investors to dump their stocks first at a better price while the retail investors are left holding their bags.

        • Dick Smith can attest to that… oh sorry not the real Dick Smith. The Dick Smith (bought, pump & primed then IPOed by VCs) that went into administration and now a trading name of Kogan.

        • It’s unfair…..how come it’s legal?

  • Up, down, sideways, around in circles.

    Until there is a off document out there, it's just chatter. Beyond all the opinion, in the absence of a set of financials and an offer price it's like debating who'll win the grand final in 2030. Even with those materials it's still a debate as to who'll win next year's grand final.

  • I think wishcards 5% discount deal being discontinued will have a big impact on their revenue going forward. if not for this I would have jumped on their IPO

  • if you know how the whole thing works, you will not even need to ask the question… lol… seriously….

  • What is Cashrewards (CR)business model again? I mean how do they make a decent profit?

    Just bugs me that the difference between the vendor pays to CR and CR to the customer (could be the detla between cashback rate, and/or admin / marketing fee CR charges as a percentage) + the interest CR makes when they holding our unclaimed cashback, could make money big enough for a IPO.

    The only consideration that worthwhile for investors are, is the intangible product they sell/ share, that is, our data, values that much to their vendor to substantiate the said fee at current level? if yes, for how long?

    Yes we are the product they sell too.

    • I mean how do they make a decent profit?

      The amount of profit a company makes doesn't drive the price action. It's all about how it pumps on the first day.

    • I remember a similar company featured on dragons den, the only thing they were interested in was the consumer data.

    • The data is almost worthless and not their business model. The websites you’re being tracked on are ALREADY tracking you. Cashrewards doesn’t even do the tracking themselves; they get reports from the vendor. That’s why it takes a while to track. Those vendors have you on their OWN website, so they already know what you’re looking at, and what you’re buying… and a lot of them are already running third party analytics as well. Cashrewards isn’t sitting on some goldmine of data. They’re making money from skimming the cash off the top and that’s about it.

      • The data about how many individual spend across different vendors seems useful to me, especially not one vendor can collect that much data. (Except Google, they can.) The cashback website is becoming a new marketplace like Kogan and catch, we land on them first instead 9f going to store directly. The aggregated data can determine valuable marketing opportunities by knowing today's buyer behaviour. Think about days when CR do $2 cash back on all sites, $2 on all except on ebay, 10% off on fashion stores etc.

        Just thinking about an individual data like loyalty program is a bit of yesterday gold.

        • Just imagine Dell goes to a cashback company asking "give me all the customers who have spent more than $2,000 at Lenovo over the last 6 months"…

          That would be very valuable.

      • Those vendors have you on their OWN website, so they already know what you’re looking at, and what you’re buying

        Yup, what you're looking at and buying in their store, but not other stores/your competitors.

  • It's a very bad idea to invest (or not invest) in a Company based on the investor's personal dealings with the Company. It injects all types of biases into the investment decision, and this decision should be as unbiased as possible.

    It is an even worse idea to ask random people on an internet forum for investment advice.

    An investment should be purely based on your own thoughts and assessment.

    You can choose to read the advice of some really knowledgeable investor, but this should be advice, such as a newsletter, where the person gives some clear reasons for his advice, and from someone with actual name and solid track record. It shouldn't be from 'RandomForumUser1234'.

  • Not as good as property investing. Just buy houses you'll be a multi-millionaire in 12 months.

  • I heard they are working on an app - it's quite frustrating needing to use desktop to get cashback. If they get that right it could lead to lots of further growth.

    I like the in store cashback best because I just need to ensure I use one of my linked cards. No need to fire up the desktop to get a few $ in my CR account…

  • Two thoughts

    Their market presence looks very dependent on ozbargain. It gives them a lot of advertising. They also market to us specifically and know which accounts use ozbargain.

    All companies these days appear to be geared at selling to investors, operating unsustainably. There have been some generous perks recently for new sign ups and existing users.

  • Wonder if there will be an "Ozbargain offer" for the CR IPO? lol

    • wonder what it might be? Buy at least $5000 worth of stock and get access to Woolworths 5% off egift cards again, get advance 24hr notice of any big deals and $2 bonus payable 90 days after IPO goes live? :)