This is my final serious warning to the public for 2015 about Australian Company BPS Technology (ASX:BPS) prior to my publishing the book and website Bartercard Exposed in Q1 2016. BPS has three divisions, Bartercard, Tess and Bucqi; all of which are losing money. BPS is a simple Pump & Dump operation with the Directors desperately attempting to hold up appearances of what is actually a sinking ship until they can quit their shares in July 2016, and escape with their payout. I predict that their efforts though will be unsuccessful and that Bartercard, the barter industries longest-running & biggest fraud will implode sometime in Q1-Q2 2016.
The current directors of BPS Technology (ASX:BPS) bought Bartercard from founder Wayne Sharp at the wrong time and paid way too much for it. It was, as Wayne says when he sold it, “the happiest day of his life!” for very good reason. Their egos caused them to make a series of huge mistakes – they underestimated Wayne’s resourcefulness and overestimated the value of what they were buying. More importantly they underestimated the challenges that the Bartercard operations had; misjudged the market situation and grossly overestimated their own ability to do what Wayne did, which was to think strategically and actually run the show!
The IPO of BPS Technology was created in Q1 2014 for one reason only – to get a return on their dud investment. Bartercard was in a serious decline and continues in that decline in all metrics of business measurement – membership numbers, franchise numbers, trading volume, satisfaction levels and most importantly profitability.
Bartercard was (and now BPS still is) a huge cash sink-hole.
The BPS IPO was stitched up with an ‘off-the-record’ director who arranged for a superannuation fund to buy/invest into the new BPS business, thus the ultra-short listing time. The new business IPO was based on a very pretty $AUD3m (but in fact very shonky) Prospectus that claimed:
1. Bartercard to be a rip-roaring success;
2. Tess to have the industry Association’s exclusive endorsement and huge global potential; and
3. Bucqi (a loyalty/rewards platform) to have huge potential.
Time has proven my analysis (during the period of the launch) to be highly accurate for:
1. Bartercard continues to decline in all business metrics;
2. Tess was late to market, has essentially no income and has failed to deliver anything like that promised; and
3. Bucqi has been delayed, had minimal take-up (even in a captured market) and is actually little more than an outright commercial failure
Bartercard is the primary business unit of the BPS Technology operations. It has a diminished Australian hub; a moderately strong New Zealand, a fledgling USA and a failing UK presence. According to my informants, it is clear that all operations are losing money (although I haven’t had a recent update from NZ) and the company is hurting – quite badly. The USA launch for example was a total fizzer – Paul Bolte’s hyped foray into the huge USA market has been grossly unspectacular and cost them huge money. The UK has a massive management overhead and survives primarily through their sports sponsorship “tax carousel” fraud .
Bartercard’s huge house account (i.e. Trade Deficit) is now in the vicinity of $AUD400m; inflation is running rampant in the Bartercard currency with inflated prices and part cash/trade deals the norm as members now widely realise that a Bartercard Dollar or Bartercard Pound is dropping in value. This inflation is fuelled by Bartercard’s own raping and pillaging for cash conversion just to pay their own wages/bills and is now at such a serious level that I predict the currencies demise relatively shortly.
The BPS Technology company has burned through all the cash received from their IPO in a little over a year (with a $AUD4m overdraft required earlier in 2015!) and recent staff layoffs (and reportedly was even unable to pay them out in cash!) are indicative of a company in serious financial trouble.
My advice is that BPS Technology is an unsound investment, regardless of the figures presented to investors. It is a company in decline; robbing Peter to pay Paul; borrowing to pay the bills and substantial debt deliberately hidden so that the directors can benefit personally. This cashing up is an event planned for c. July 2016, most likely (although this is only conjecture) with more investment from the same/similar sources as pre-arranged for the initial IPO.
Bartercard members with Debit balances (where they owe the system) should be very careful of cash converting efforts from Bartercard themselves. Any hint of your wishing to escape the system will cause an immediate cancellation of your account and then court actions to recover your debt in CASH. Bartercard are a litigious company and are very aggressive & effective with their litigation. You would be very wise to trade back to zero in goods and services while you still can – then and only then terminate your membership.
Bartercard members with Credit balances (where they have a credit in the system), and this is the majority of members, should be preparing for a total loss as the barter exchange implodes. Obviously getting ANYTHING in return for the goods and services you have already supplied into the system is better than nothing. The sooner you do this, the better your chances as a failing trade exchange generally goes down very quickly when it does go.
Universal Currency should be recovering value from the long outstanding overdrafts extended to Bartercard that have never been touched. Aside from the immorality of bailing out one particular commercial operation with UC funds, allowing the massive multiple debts as large as Bartercard has to sit untouched and dominate the currency in the face of an obvious serious decline in the Bartercard business is recklessness in management, with a serious loss looming for the Universal Currency participants.
Sports clubs should be warned that accepting sponsorships has associated risk – first, you will be liable for GST on the sponsorship in cash, up front; and secondly you will find it difficult to get real value back from your credits as the Bartercard trade exchange is in decline.
Endorsements and those who associate with the Bartercard/BPS Technology brand/business will be exposed as the brand is recognised more and more as toxic. Public figures should exercise extreme caution and make efforts to distance themselves from the brand at their earliest opportunity. IRTA for example should be withdrawing their public endorsement of the Tess product, distancing itself from an incestuous relationship with one particular member and returning to representing their membership as a whole .
Shareholders of BPS Technology have both a financial and moral issue – their investment has been into a fraud thus selling up now simply transfers that loss (or a portion of it) to another person/entity. Further investment into BPS is, to put it mildly, unwise, as is holding on expecting things to get better. They won’t, for they can’t.
Bartercard staff that are not yet laid-off and franchises with concerns should act to protect their positions with urgency. The phrase, “rats off a sinking ship” comes to mind. Abandon any thought of getting cash from Bartercard or BPS for you will know well that cash only goes one way. Settle for what you can while you can and look after yourself.
The directors of BPS Technology must keep appearances of a successful, profitable business until at least July 2016; then they must secure a buyer for their shares and do this under the increased scrutiny of those familiar with my blogging and upcoming Bartercard Exposed materials. They must ensure that their broker can ‘do the business’ for them when they can legally quit their shares without legal or ASX intervention. Should the ASX suspend trading of BPS (if they suspect a Pump & Dump is occurring) or should the courts award any applicant an injunction to prevent the Directors selling off their shares (this is certainly possible) then they will have little hope of escaping the sink-hole that the Bartercard/BPS business really is.
In an upcoming post I speak directly to Trevor Dietz with an Open Letter about his crooked operation, and explain what I will be doing and why, up-front, long in advance of the Bartercard Exposed operations that I have planned for Q1, Q2 2016.
This is a simple sober warning designed to be factual; to lack strong emotion or excessive commentary but well in advance of my activities that will expose the underside of the Beast that Bartercard truly is.