Mobility One (LON: MBO) shares dropped 25% this morning on the failure to gain a licence from the Financial Conduct Authority. It's really rather difficult to know what to make of this to be fair about it. Obviously, that the licence wasn't granted is a bad thing but what matters much more is why was it declined? There are possible reasons which make 25% look about right and others which make it look much too small. Given that we're not given the detailed reasons for the FCA's thinking it's that difficult to task to think through where we should put the MBO valuation as a result.
Mobility One is an e-commerce infrastructure and payments provider. Clearly a necessary part of any online ecosystem. Also clearly an area where people do need to be licenced - Wirecard did exist and did happen after all. So, that an FCA licence might be required along the way is fair enough. The application here was for an electronic money institution licence - this is to do with being able to hold balances, not just be a portal along the way for a flow of payments. So, it matters why the FCA didn't issue. We get told that: “The Group has received feedback from the FCA in relation to the Revised FCA Application requesting, amongst other matters, further information in relation to certain disclosures relating to M-One Tech Limited's proposed business plan. While this feedback is welcomed, the Group has now accordingly withdrawn its Revised FCA Application.” The result is that they're looking at their whole business pln because - given that this is the revised version - it might well not be possible to gain that licence at all
Mobility One share price from London Stock Exchange
But what we really want to know is why was the licence declined? If it's that the FCA didn't like the business plan then that's one thing. Ah, well, try something else then. But if it's that the FCA didn't like Mobility One, well, that's entirely another. If the bureaucrats who oversee licences don't like a company then perhaps we shouldn't either?
Why Mobility One didn't get the licence matters - but unfortunately that's the thing we don't get told.
