'I feel fine," insists Betfair chief executive David Yu. And why shouldn't he, frankly. The online betting exchange's flotation has just become one of this year's most successful listings.
Betfair avoided the travails of fellow web-based company Ocado, with a 19pc uplift in first-day trading. And Yu should be feeling flush, having sold £5.2m of Betfair shares in the float and retaining options over stock worth a further £17.5m.
Still, it's worth asking the question. Yu's comment is his first public response to a disclosure on page 200 of the flotation prospectus, stating that he was absent from work for a brief period in March with a cardiological complaint.
Then there are the 13 pages of "risk factors" noting potential concerns including the fact that the company is not currently obliged to hold a licence in territories representing 27pc of its latest
full-year revenues of £341m and the reminder that "in some jurisdictions, online betting and gaming may be illegal".
Gambling can be a risky business, though Yu is at pains to point out how different the world's largest international online sports betting provider is to conventional bookmakers.
"What we do," he says, "is bring a community of users together and match people who have opposing views. They're betting through us but against each other. The bet is legally with us. We hold the bookmaker's licence.
"We're the bookmaker that takes the bet but we only accept the bet if we know we can perfectly hedge it with someone of an opposing view. That's the magic of our technology. We never lose money on the betting."
Founded 10 years ago by Andrew Black and Ed Wray, Betfair now has more than 3m registered users and 800,000 active customers.
Its sophisticated technology takes 4,500 bets every second, amounting to 5m transactions a day – more than all Europe's stock markets combined – with £284m of customer funds on deposit ready for wagering and a further £3,000 deposited with Betfair every minute.
Betfair claims its bet-matching technology and ability to constantly update betting odds during live sporting events give punters prices that are, on average, 24pc better than those of traditional bookmakers in horseracing. The most dramatic examples of this have become legends in the industry.
One came during a race at Cheltenham in 2006 when a customer in Pontypridd asked for a £10 bet on a horse called Noland but Betfair found a matching bet at 999-1 at a moment the horse was 10th. It won the race.
And in 2002 at Southwell, odds of 999-1 were found for a £4 bet on Family Business after its jockey Tony McCoy fell off. The other horses in the race failed to finish but McCoy managed to remount and won.
Yu, 42, is delighted to have got the float away, saying the process was "exciting, exhausting and thrilling all in one".
It was controversial, too, with Goldman Sachs criticised for under-pricing the offering, which did not raise any new money and resulted in just 15pc of the existing stock changing hands.
However, Yu defends the pricing, saying: "It was up to the market to set the price. We believe the flotation is really the start of a new chapter for us. I believe we can grow faster as a public company than as a private company."
What about all the disclosures in the prospectus, not least the one about his health? Can he give any more details?
"I think you've seen it all in there," he says. "Thanks for asking about it but I feel great. We decided that in the interests of transparency we should put something in but I feel fine. I wouldn't have gone through this process if I wasn't."
Yu, an American who has been with Betfair since 2001 – working his way up from chief technology officer to chief operating officer and then taking over as chief executive in 2005 – has lots on his plate.
Broker KBC Peel Hunt believes Betfair can increase its earnings before interest, tax, depreciation and amortisation (Ebitda) by a compound 25pc over three years.
However, net gaming revenues from Betfair's core business slowed to 7pc in the year to April 2010, or about 5pc when stripping out interest on client funds. Could Betfair's low-risk model also make it a low-growth utility?
"I must admit I've never heard that," says Yu. "I think there's tremendous growth. There's so much headroom in the market for growth that I think being called a utility is quite a few years away."
He sees continued growth in the global online gambling and betting market, particularly in sports betting, where Betfair's revenue grew 12pc last year, with 970,000 new registrations and 441,000 new customers.
There's also potential for cross-selling of other gambling products, such as online poker and casino, and there are new channels for customers to place bets, with iPhone, iPad and BlackBerry apps.
http://www.telegraph.co.uk/finance/...ef-turns-his-sights-on-financial-trading.html
Betfair avoided the travails of fellow web-based company Ocado, with a 19pc uplift in first-day trading. And Yu should be feeling flush, having sold £5.2m of Betfair shares in the float and retaining options over stock worth a further £17.5m.
Still, it's worth asking the question. Yu's comment is his first public response to a disclosure on page 200 of the flotation prospectus, stating that he was absent from work for a brief period in March with a cardiological complaint.
Then there are the 13 pages of "risk factors" noting potential concerns including the fact that the company is not currently obliged to hold a licence in territories representing 27pc of its latest
full-year revenues of £341m and the reminder that "in some jurisdictions, online betting and gaming may be illegal".
Gambling can be a risky business, though Yu is at pains to point out how different the world's largest international online sports betting provider is to conventional bookmakers.
"What we do," he says, "is bring a community of users together and match people who have opposing views. They're betting through us but against each other. The bet is legally with us. We hold the bookmaker's licence.
"We're the bookmaker that takes the bet but we only accept the bet if we know we can perfectly hedge it with someone of an opposing view. That's the magic of our technology. We never lose money on the betting."
Founded 10 years ago by Andrew Black and Ed Wray, Betfair now has more than 3m registered users and 800,000 active customers.
Its sophisticated technology takes 4,500 bets every second, amounting to 5m transactions a day – more than all Europe's stock markets combined – with £284m of customer funds on deposit ready for wagering and a further £3,000 deposited with Betfair every minute.
Betfair claims its bet-matching technology and ability to constantly update betting odds during live sporting events give punters prices that are, on average, 24pc better than those of traditional bookmakers in horseracing. The most dramatic examples of this have become legends in the industry.
One came during a race at Cheltenham in 2006 when a customer in Pontypridd asked for a £10 bet on a horse called Noland but Betfair found a matching bet at 999-1 at a moment the horse was 10th. It won the race.
And in 2002 at Southwell, odds of 999-1 were found for a £4 bet on Family Business after its jockey Tony McCoy fell off. The other horses in the race failed to finish but McCoy managed to remount and won.
Yu, 42, is delighted to have got the float away, saying the process was "exciting, exhausting and thrilling all in one".
It was controversial, too, with Goldman Sachs criticised for under-pricing the offering, which did not raise any new money and resulted in just 15pc of the existing stock changing hands.
However, Yu defends the pricing, saying: "It was up to the market to set the price. We believe the flotation is really the start of a new chapter for us. I believe we can grow faster as a public company than as a private company."
What about all the disclosures in the prospectus, not least the one about his health? Can he give any more details?
"I think you've seen it all in there," he says. "Thanks for asking about it but I feel great. We decided that in the interests of transparency we should put something in but I feel fine. I wouldn't have gone through this process if I wasn't."
Yu, an American who has been with Betfair since 2001 – working his way up from chief technology officer to chief operating officer and then taking over as chief executive in 2005 – has lots on his plate.
Broker KBC Peel Hunt believes Betfair can increase its earnings before interest, tax, depreciation and amortisation (Ebitda) by a compound 25pc over three years.
However, net gaming revenues from Betfair's core business slowed to 7pc in the year to April 2010, or about 5pc when stripping out interest on client funds. Could Betfair's low-risk model also make it a low-growth utility?
"I must admit I've never heard that," says Yu. "I think there's tremendous growth. There's so much headroom in the market for growth that I think being called a utility is quite a few years away."
He sees continued growth in the global online gambling and betting market, particularly in sports betting, where Betfair's revenue grew 12pc last year, with 970,000 new registrations and 441,000 new customers.
There's also potential for cross-selling of other gambling products, such as online poker and casino, and there are new channels for customers to place bets, with iPhone, iPad and BlackBerry apps.
http://www.telegraph.co.uk/finance/...ef-turns-his-sights-on-financial-trading.html
