Study Group: ATM Market Experts

GLG News^SM Analyses by this Study Group's Leading Experts(?)

WAMU CLOSED: SOLD TO JP MORGAN CHASE FOR $1.9 BILLION

September 29, 2008

Analysis by:Kamala Worthington, President,

Analysis of:WaMu Becomes Biggest Bank to Fail In US History | news.yahoo.com

Rumors had been swirling over the last few weeks that WAMU was shopping for a buyer, however, the OTS (the Office of Thrift Supervision) couldn't allow WAMU to continue its operations under constraints of deposit outflows exceeding $16 billion in the last week or so and JP Morgan Chase becomes the benefactor of WAMU's collapse and acquires WAMU's deposits for a low ball amount of $1.9 billion. WAMU may have staved off a collapse if the proposed $700 billion bailout plan had been approved, however, what we witnessed this week was alot of grandstanding and political posturing but no agreement to pass and legislate the proposed $700 billion bailout plan. WAMU becomes the latest news headline and the largest FDIC-insured institution on the list of bank failures in 2008. The FDIC fund wasn't impacted by WAMU's collapse, however, other S&L's and thrifts that have failed to meet their fiduciary responsibilities have only added to the downward spiral of the U.S. economy. 

TRM Gets $11 Million Lifeline; Buys Rival "Access to Money"

April 23, 2008

Analysis by:Kamala Worthington, President,

Analysis of:BREAKING: TRM Buys ATM ISO Access to Money for $15 million | www.atmmarketplace.com

TRM's $11 million "lifeline" from LC Capital Master Fund Ltd. helps the troubled ATM owner pay off its debts and gave TRM the seed money to acquire its rival, ATM deployer "Access to Money." When TRM acquired eFunds ATM Portfolio of 17,200 ATMs in 2004 for $150 million, TRM had over 22,000 ATMs and owned the largest international ATM network by a U.S. company. Since that time TRM has restructured its ATM Operations and its ATM Network fell to less than 9,300 ATMs and forced TRM to sell its international ATM Operations and what use to be its "core" business, its "Photocopier Unit" to remain in business. TRM grew way too fast through acquisitions and the acquisitions didn't generate significant cashflows or decent ROI. Since 2Q07, TRM has focused on its current assets rather than growing through acquisitions, reduced its expenses, simplified business operations, cleaned out those low transacting ATMs acquired from eFunds and added units to their legacy ATM fleet.   

RBS To Raise $20 Billion+ In A Rights Issue & Sir Fred Goodwin Can Keep His Job For Now

April 21, 2008

Analysis by:Kamala Worthington, President,

Analysis of:RBS Set To Announce Major Capital Increase | www.iht.com

It's hard to fathom that "Fred the Shred's" (known for his brutal cost-cutting in the past) role in the battle for ABN-Amro between Barclays may have led to RBS's plans to raise the largest cash call of British banks of $20 billion+ in a 1-for-2 basis "rights issue" to raise capital and shore up its balance sheet. RBS may also sale its business unit Angel Trains for $6.9 billion to raise capital. RBS has already wrote down over $3.3 billion on the value of mortgage-backed securities, loans to private equity groups and securities guaranteed by bond insurers who are cash strapped. RBS finds itself in a peculiar predicament with low capital levels in part due to the massive acquisition of ABN-Amro in 2007, which ate up a lot of its cash. RBS's Tier 1 Capital Ratio is 4.5%, (the number regulators look for to determine a bank's financial strength) which is the lowest of any British bank and falls under the threshold where regulators can intervene and force banks to recapitalize.

Alliance Data Sues Blackstone For $170 Million "Breakup Fee"

April 21, 2008

Analysis by:Kamala Worthington, President,

Analysis of:Blackstone Says Alliance Data Lawsuit Spurious | today.reuters.com

Blackstone Capital Partners V L.P. may have had a case of "buyer's remorse" with its $7.8 billion deal including the assumption of certain debt of ADS. The deal valued ADS at $81.75 a share, representing a premium of about 30% over ADS's closing price of $62.96 on 5.16.07. However, since that time ADS's share price has fallen to $52.84 a share as of 4.18.08. ADS is alleging that Blackstone "refused to accept reasonable and customary regulatory requirements and prolonged negotiations with the OCC," which resulted in a breach of the deal. ADS is seeking the $170 million "breakup fee" Blackstone agreed to when it entered into the deal with ADS on 5.17.07. The deal was expected to close by year-end 2007, however, due to lack of liquidity at Blackstone, the deal was delayed for a second time and ADS is suing Blackstone for "breach of contract." The deal was touted as a marriage amongst a leader in card processing with Blackstone's investment expertise would create a powerful partnership.

Is 2008 The Tipping Point For Mobile Banking In the U.S.?

April 21, 2008

Analysis by:Kamala Worthington, President,

Analysis of:Online Banking Is Old News. Hello Mobile! | www.emarketer.com

The demand for mobile banking is growing and over the next 4-5 years, m-banking and m-payments will drive the boom in demand for wireless payments and banking. Banks, processors, card networks and mobile carriers are pushing two types of transactions with mobile devices, m-banking and m-commerce. The m-banking segment is projected to  grow to $50 billion by 2012 and m-payment transactions volumes will surpass $36 billion by 2012. Banks and credit unions have launched pilot programs to determine if SMS-Short Messaging Service, NFC-Near Field Communication or WAP-Wireless Application Protocol is the "killer application" for m-transactions. Consumers are interested in m-banking transactions that allow them to check balances (61%), account history (17%), transfer funds (11%), make bill payments and P2P payments (8%), password change (2%) and m-payment transactions enable consumers to download music, ringtones, games, access the Internet and conduct transactions at the POS.  

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