Visa, the patron of the mobile payments specialist Monitise has decided to reduce its investment stake and focus on its own in-house technology causing its stock to tank. This on the back of two revenue warnings alreay this year. This must bring into question the sustainability of Monitise’s business model?
He adds: "The decision by Visa to move away from Monitise after working together since 2009 raises concerns about other long-term contracts that Monitise has with customers such as Visa Europe, FIS and RBS. If Visa chooses to develop expertise in house, why wouldn’t the others? "Monitise is a concept stock and hence the credibility of the management and the investment proposition is critical to gain investor trust. Berenberg believes that this trust has been hurt by the two profit warnings this year, and again by Visa’s actions."