Softbank sell out

BN 07/08 08:30 *BETFAIR BOOKBUILD: 11M SHARES BN 07/08 08:31 *DB REPORTS LAUNCH OF ACCELERATED BOOKBUILD IN BETFAIR SHARES BN 07/08 08:32 *DB: BETFAIR SHARES BEING SOLD BY SOFTBANK UNIT CHARLTON CORP Or, looked at another way, 08:30, Betfair share price, £8.80; 08:32, Betfair share price, £8.34. Yikes. What to make of that? I heard soon after from a source very close to it that actually Goldman traders had taken the whole lot at £8.09.6, but subsequent conversations, and the price movement of the shares, suggest that that was wide of the mark. Perhaps it was a backstop bid; or maybe different houses were put in competition. Either way, judging from the £8.29 market low on the day, and the £8.41 on the close (down 4.38%), subsequent reports of £8.20-25 are ones I'm more likely to believe. [Since I wrote this, someone has confirmed to me that it was indeed £8.09 off-market for the block, flipped into the market at £8.29.] Wherever their block trade took place, though, Softbank are out; and the question I have been asked a few times today is what does it mean now for Betfair's share price, or for the company as a whole? Take my view with the caveat that I have no official information of any sort, and add the warning that any cynic will give you that I am a reasonable-size shareholder in the business, and therefore can't possibly have an independent view of the world. And then if you're still interested, read on... The gloom-mongers among you who love to tell me how far away the float price now looks are guaranteed to take the view that as Softbank have been in for ages, and must have timed their sale thinking that they've picked the top. Ignoring my obvious mischievous counter that their having initially bought at a 10-year high should be reason in itself to pile in on the day they sell (on the basis that if they're true to form, it's a likely low),  a more valid response would be this: in my experience, they won't have made this decision after sitting down with management and deciding after a lengthy conversation that they don't like where the company's at or what their numbers look like. I was thinking to myself only this morning that there are plenty of reasons to be positive, as analyst upon analyst has detailed of late, and in my view, Softbank selling out because they've decided they want the cash for something else doesn't change that. So, I am a buyer on the weakness. Indeed, today I literally was: having sold a small number of shares ahead of CVC at £9.20, I decided today to get back in. Here are my three reasons why: The shares have never been very liquid, which has put a number of people off them. The reason for the illiquidity is that too much of the stock was held in blocks. One of those blocks got released today. Softbank have long been known to have slightly itchy feet about the company. (Wouldn't you, if you'd bought at £13.20 in April 2006?) The fact that they were considered a likely seller made it easy for people to short the stock, confident that a big seller would appear on any signs of strength. That cannot have done anything but weigh on the shareprice; but as of today, it no longer applies. Betfair's had a miserable few years, but they've done a lot in the last 12 months to change the position of the company dramatically. Not all of it will please everyone who loves The Company That Was, but looked at from a purely financial perspective, I felt before the fall this morning that the shares were on the recovery trail. Softbank selling out doesn't change the fundamental numbers. Take it with a pinch of salt, as I say. But that's my position fully declared, in every respect.