Email Response from CEO Darren Dunckell 8/19!
I sent Darren Dunckell an email with a couple questions and he responded back. Wanted to pass it along. Thanks Darren.
As a FXIT shareholder I was wondering if you could answer a couple of questions.
It has been sometime now since the pumpsanddumps alert, and it seems they have laid off FXIT. What are you and/or the company doing/or going to do to build back the confidence in FXIT?
I believe that if we continue to provide investors with as much information about what we are doing and how the company is performing it will build confidence in shareholders. In addition, I am trying to make myself available for all shareholders and would like to help generate more interaction with shareholders. The earnings call we did last quarter is an example of trying to create opportunities for shareholders to not only hear my ideas but also a chance for them to ask questions and voice any concerns, support or ideas.
They seem to bring up a lot about the past. What specific examples from your background can you provide to prove your honesty and integrity?
I believe that the actions people take speak louder than any words. I have since day 1 with this company made myself available to anyone who wants to contact me. If you were on the Q1 earnings call, you may recall that I took any and all questions. I did not try to dodge any questions regardless of the topic. What I have found in my life is that people who are out in the open and don’t hide behind screen names and P.O. Box addresses tend to be the most genuine. The internet has created great opportunities in this world but it has also brought out the dark side of humanity by allowing anonymity.
Almost everyone i know that got into FXIT has lost over 80% of it value and it doesn't look it is coming up.
I have been in the Financial Services business for over 20 years and in my experience “stories” about stock, good or bad, have only carried a stock for 3 to 6 months, at some point fundamentals took over and began to create a longer term valuation. I believe that this will be the case with FXIT as well.
Are you doing anything about trying to improve the share price?
The company continues to report the results of our business. Most recently our 2nd quarter financials, in which the consolidated revenues of the first 6 months were just over $7 million compared with last year’s full year revenue around $7.5 million. We trying to get out the message to gain the attention of investors so they can evaluate and decide if they see value. I continue to talk with existing shareholders and potential shareholders because I believe that the better investors understand the business the more likely they are to buy. The Forex business is a business that not everyone completely understands which in my opinion is why FXCM and GCAP are trading at such low multiples compared to other financial services companies. One of my jobs is to better educate the investor community so that they can make informed decision about buying or selling FXIT stock. I believe this will improve the share price of the stock.
Do you feel that the marketcap represented by your shares represents a fair value for your company, and if not, why not?
As CEO I am not able to give price targets but there are several valuation methods which we believe suggest the stock may be undervalued from a fundamental standpoint. For example, the market cap is currently less than 1 times 6 months revenue, the stock is trading at less than 10 times 2nd quarter basic earnings per share, and there are others. I believe that the current valuation has been affected by investors understanding or lack of understanding of the business we are in. As we the company continue to educate the investing public about the company and the industry, we believe this will eventually be reflected in the stock price.
Who are FXIT biggest competitors and what are you doing that your competitors aren't doing yet?
We compete to some extent with all of the major players in the online retail forex trading space including FXCM, Gain Capital, Saxo Back, etc. although since the market is still I believe in the early growth stages (Aite Group estimates approximately 8 million+ on line Forex traders out of 110 million+ on line investors world wide) we are not typically taking an existing customer of a competitor in order to grow. Most of our growth is coming from new traders. In addition, while each of these companies have customers in our primary target markets these competitors are not necessarily targeting the same markets we are.
Do you have anything in your product pipeline today that will give you a clear competitive advantage in the future?
We have developed a binary option product that we believe presents significant opportunities in the market place. I would not necessarily say it provides a clear competitive advantage but it is a product that not all of our competitors have. I do believe that our team of employees and our ability to successfully market and retain customers makes us very competitive in the marketplace.
Is entering into the US market a major goal of FXIT and how is going to effect FXIT?
It is a goal for FXIT to enter the US market. I cannot say it is a major goal. Our operating company has built from Jan 2009 a business that has taken in over $25 million in deposits and processed over $50 Billion in trades without operating in the United States. In 2010, according to the International bank of Settlements approximately 75% of transaction occurred outside of the United States. While the U.S. market I believe has great potential it is not essential for success. We believe that we can create some synergies within the United States that increases the attractiveness of operating in the U.S.
But until that can be established the business matrix is much different. Offshore we allow customers to leverage their equity 100 times and the typical spread is around 3 pips (1 pip = $0.0001) which provides a round trip revenue of approximately 3% of equity invested. In the U.S., customers are only allowed to leverage 50 times and we would only be able to capture approximately 50% of the spread so around 1.5 pips so the round trip revenue would be about .75% of equity invested.
Is it OK for me to post your responses on the ihub forum?
YES
