“The Next Great Payment Revolution” — the Motley Fool’s NFC Stock is …

Motley Fool's Secret "Your Credit Card is Dead" Stock

Seems like I’m seeing a lot more of David Gardner over the last month than I had for ages — he’s the growth-focused half of the Motley Fool brothers, and this time around the pitch is for his “aggressive growth” newsletter Rule Breakers. This letter has brought us a lot of interesting ideas in the past, including Akamai (AKAM), Baidu (BIDU), Universal Display (PANL) and Intuitive Surgical (ISRG), and also plenty of lesser performers — as you’d usually expect with an advisory focused on breakthrough growth stocks with expensive-looking valuations, when they pick the wrong stock the pick can look very bad very fast, as with folks like Harris & Harris (TINY) or Sigma Designs (SIGM).

As with most aggressive growth newsletters, subscribers plan for the small number of huge winners to outpace the large number of losers — and, if you’re a subscriber who can’t buy all 40+ stocks in their list, you hope that you pick the best ones. So is the pick that Dave Gardner is pitching today going to be a breakthrough gainer (or a “Spiffy Pop,” as they like to call ’em), or will it be a dud?

Let’s figure out who it is first, shall we?

Here’s the intro to the letter:

“Your credit card may soon be worthless. Here’s why …

“The Three Little Letters Your Credit Card Company Doesn’t Want You to Know About…

“Soon, you’ll be seeing them everywhere you go. That’s because they’re about to make the plastic in your wallet obsolete — and set off the biggest gold rush we’ve seen since the dot-com days.

“Google, Apple, Nokia, and Microsoft are all desperately battling to stake their claim — but YOU could get rich by simply snapping up shares of the little-known company behind this credit-card-killing technology before everyone else does.

“Everything you need to start cashing in is revealed below…”

The letter does a good job of describing the hugely profitable development of credit cards, from the days when Diner’s Club paved the way to a new way of transacting business to the point where it’s now a multi-trillion dollar industry.

And as with all of Gardner’s “Rule Breakers,” the stock has already shot up (that’s one of his qualifications — the stock has to already be on the move, and has to be considered “overvalued” by the cognoscenti, among other triggers, before he likes it) …

“… over just the past nine months — as the smart money has begun quietly pouring into this stock — its shares have shot up as much as 245%…”

So what’s the big idea here? We’re being told that there’s an upstart payment technology that’s threatening credit cards, and it’s called near field communications (NFC) … here’s how they put it in the ad:

“But now three little letters are threatening to put an end to the party — and make early investors countless millions…

“Granted, you may not be familiar with the term ‘NFC’ yet — but mark my words, the technology behind these three letters is about take the world by storm…

“In fact, Barry McCarthy, President of Mobile Commerce at First Data, says that it will soon be ‘the way to pay, ultimately eliminating your dependence upon credit and debit cards, checks — and even cash.’

“And a recent article on CNNMoney.com says the arrival of this technology has started an all out ‘gold rush on the next e-commerce frontier.’ From the look of things, that’s no exaggeration, either….”

The idea is not just that there are wireless payment systems available — we’ve seen these kinds of “smart cards” and payment keyfobs in lots of applications, and they’re becoming fairly widespread if not all that widely used (I have a little RFID chip in one of my credit cards, for example, so when I remember I can wave it over the pay terminal at McDonald’s instead of swiping the magnetic strip … of course, I never remember).

No, the idea is that this NFC capability will be built into more and more smartphones — we get a long spiel about how all the names you know are developing or already providing this capability hard-wired into their phones, including Research in Motion, Nokia, Google, Microsoft, and, of course, Apple. We also get an official-looking chart that projects sales of these NFC-capable phones to hit 93,166 this year, and then climb steadily to over half a million by 2015.

The projections go on, as in this excerpt:

“But make no mistake, this isn’t just some fad or pie-in-the sky idea… it’s the future of money — and it’s going to spark the biggest payment revolution we’ve seen since Frank McNamara unleashed credit cards on the world.

“You don’t have to take my word for it, though…

“According to Forrester Research, over 12% of people in the U.S. and 6% of people in Europe have already paid for something using a mobile device… and The Wall Street Journal reports that $32 billion worth of purchases were made using mobile devices last year alone. But get this…

“Experts at Generator Research predict that number will jump to a whopping $633 BILLION by 2014 — and that some 490 million people around the globe will be using this technology within two to three years.”

So how do we invest in this? We know that most of the phone companies and all of the credit card companies are working on these technologies and networks — so what’s Gardner’s pick?

Hardware — which in this case means “chips” … here are the clues:

“only a handful of highly specialized companies have the state-of-the-art skills, artful know-how, and exclusive patents needed to build the complex components that allow NFC technology to function in the first place.

“And the company I’m about to introduce you to stands head and shoulders above all the rest…

“In fact, not only is this company the clear leader in this explosive new industry (analysts conservatively estimate it could control as much as 70% of the market — not to mention it’s the exclusive provider of all NFC components for Nokia-based smartphones)…

“But it actually helped to invent this world-changing technology — making it far and way the most trusted and highly regarded company in its field.”

And let me issue a friendly, “thank you” to the Foolies for supplying some nice, numeric clues as well — that always helps the Thinkolator operate without overheating too much …

“Samsung, Sony, Panasonic, Ericsson, Dell, HP, Cisco, and even Apple are already all top clients — yet no single client accounts for more than 10% of sales (meaning it has a highly diversified and therefore very-stable revenue stream).

“Speaking of which, last year this company saw its NFC-based revenues shoot up an impressive 41% (especially good news when you consider that this is the highest-margin segment of its business) — while overall revenues climbed a solid 25%…

“And in their most recent quarterly conference call, management noted that over the past year, both gross and operating margins have improved significantly…

“They also reported that the company has been able to more than double its free cash flow, while reducing its debt by nearly $575 million — leaving it in the best financial shape in its history.”

And one more little batch of clues, just to get you riled up?

“Of course, given that this high-flying company operates in this exciting new field of technology, you might assume its just some sort of born-in-a-garage Silicon Valley startup with no real track record of proven business know-how. But that couldn’t be further from the truth…

“In fact, this company actually operated as a division within one of the most well-known electronic companies in the world for over 50 years before being taken over by one of the world’s leading private equity firms and then spun out as a stand-alone company…

“Today it holds nearly 14,000 patents, employs some 28,000 people, and has operations in more than 25 countries — yet it’s still virtually unheard of.”

So who is it? Well the Thinkolator didn’t have to chug too hard at all to tell us that this is … NXP Semiconductor (NXPI)

NXPI was spun out of Philips a while back (that’s the “well known electronics company”), and was loaded up with debt by a leveraged buyout firm then taken back to the public markets fairly recently, but it does have a long operating history.

So although the balance sheet doesn’t look so great — it’s going to take them years to pay down that debt, and the debt is almost as high as their market capitalization even after the stock’s huge run — but the only reason it doesn’t look so great is that we’re not used to looking at semiconductor companies with big debt loads. We get used to seeing folks like Intel or ST Microelectronics with large cash hoards and no debt, which is kind of what you expect from what is usually a high margin business — especially since so many semi companies don’t even operate their own capital-intensive foundrys but are “fabless” and just design and market the chips.

The debt level of $4.6 billion for a company with a market cap of $6.8 billion would be refreshingly unleveraged in many other industries, so everything is relative — the only other big semiconductor company I can think of offhand that has a bit debt load is Freescale Semiconductor, another leveraged buyout company, but they won’t be coming public for a few more days. NXPI seems to be perfectly capable of paying the debt burden, particularly if they’re able to continue growing their NFC chip business — they are indeed the current leader in that segment, and it makes up the lion’s share of their earnings.

NXPI was a weak IPO when it was taken public by their private equity backers last year — it priced below the expected range of $18-20 or so to trade around $14 when it opened, then fell quickly to nearly $10 before it began to climb. The climb was pretty dramatic, hitting $35 or so largely because of the excitement over this NFC chip business and on solid growth numbers, but the stock has fallen back a bit to the $27 range — perhaps that’s why the ad says that Gardner is “convinced there’s never been a better time to snap up shares.”

The other overhang from the IPO is that their former parent, Philips, and the buyout leaders KKR and Bain Capital each own a big chunk of the stock — I don’t know what their lockup period is like, or if they’ve done any additional selling yet, but KKR and Bain between them hold 36% of the stock, and I assume that we should expect them to want to gradually get out of the shares or lighten those holdings, which might pressure the stock if they get into any kind of hurry to sell.

So … this is a relatively large company, with a market cap of about $6 billion, and if you look at an Enterprise Value/EBITDA valuation (to account for the debt) it’s trading at about twice the valuation of INTC or STM, and a bit above Texas Instruments (TI), but it’s hard to compare all these different types of companies in a direct way given their various specialties. EV/EBITDA is about 10 for NXPI, and analysts are projecting something in the neighborhood of $2.40 per share in earnings this year and $3.20 next year, so the valuation is certainly reasonable for that level of growth.

It’s clear that NXPI chose a good year to go public, though they might have done better if they waited a few months — last year was when their margins turned up significantly, and when they started generating free cash flow and real earnings. I expect the reason the stock isn’t higher still is that they’re leveraging themselves to this NFC chip business for future growth, and there will be more competition in that field, and that they’re still tarred by that large debt load so more cautious investors who are comparing NXPI to other semiconductor companies, almost all of which carry net cash on their books, might want to make sure NXPI can actually generate the cash to cover those interest payments. It sure looks like they can, if the analysts are at all right about their earnings and if the prognosticators are right about the mass adoption of NFC payments in the years to come, but, of course, nothing is guaranteed.

And no, this won’t destroy the credit card companies — in fact, my bet would probably be that what we’ll end up with is credit card-branded dominant FCN payment networks (Visa, MC, etc.) who are in partnership with telecom companies and whichever hardware companies have the power to demand a cut (like Apple, maybe Google). That’s just my guess, the business is certainly in both flux and growth mode, so I have no idea how it will really shake out, or if, indeed, people will actually grow to like and demand this seemingly “inevitable” payment technology (to be fair, it’s been called “inevitable for more than ten years now, though perhaps the technology is now catching up to the futurists) — it’s an infinitesimally small business right now compared to credit cards, but certainly lots of smart folks expect dramatic growth.

Given the state of flux in the business now, perhaps it makes sense, as Gardner seems to be pitching, to look at the biggest chipmaker in the field as the lowest common denominator — they might not always control such a big market share, but they’re starting with a strong share in the early days, so there’s a bit less uncertainty than their might be for some other players … and heck, the CEO has even said that if someone offers them a huge premium they’ll sell the company again, so perhaps we can hope that they’re not run by idiots.

And compared to other stock ideas that have come from our favorite “Rule Breaker” in recent months, it’s not expensive (OK, it is expensive on trailing earnings, but not on forecasted earnings — so you have to have some faith that the analysts are on track), so we’re talking about a PEG ratio (again, assuming the analysts are right) of well below 1, bargain territory which belies the newly public, highly indebted, new market uncertainty that should be part of any assessment of the stock.

If you’re looking for other chip companies with a NFC product, many are developing for this market but Qualcomm (QCOM) seems to be the other large player in the field — and though NXPI is certainly not a “pure play” on NFC, it certainly looks like one compared to QCOM.

If you’ve got an opinion about paying for your gas with your cell phone, or have a bone to pick with NXPI’s projection that their FCN unit sales will double in each of the next two years, let us know with a comment below. I’m finding myself to be actually a little bit skeptical about the broad potential of the NFC payments “revolution” in the near term, but I might just be a bit too stodgy — and it’s probably true that even a minor level of adoption by consumers could increase hardware demand considerably, since the growth is starting from such a low level.

And if you’ve been a Rule Breakers subscriber in the past, we’d all love to hear what you thought — just click here to submit a brief review for your fellow investors over at Stock Gumshoe Reviews (Rule Breakers is currently the top-ranked Fool newsletter by our readers, but that’s based on a very small sample). Thanks!

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Share Your Thoughts

ShowHide Comments (59)
      • TD Pointer
        Dec 31 2013, 01:51:06 pm

        Well, it’s at $46 today (December 31, 2013) so if you all still have it, you’re in good shape. The question now is… “Is it still worth buying?”

    1. blancoaker
      May 24 2011, 05:05:47 pm

      This company sounds interesting, but I would like to know more about some industry specifics before I put any $ down. Does anyone know if this company will supply the chips (or ?) that will read the phone signal to charge the merchandise? If so, that is almost another whole market segment. It is my understanding that Europe does not use the magnetic card readers as their cards have chips. Does this company make those chips? Will the European readers be able to read this NFC chip? And will our phones be able to charge purchases in Europe, which they are not able to do now?

    2. Kaiser So Say
      May 24 2011, 10:01:47 pm

      NY Times-Business Day-Technology section-Published May 24th 2011


      On Thursday 5-26-11

    3. Guest
      May 27 2011, 08:30:57 am

      I am a very recent user of this site and I command Travis for the great work he is doing! I am in a payment card industry and must admit that the idea of NFC is not really new. One of the biggest issues of the NFC is security of a payment transaction, including transmission of secure data between a mobile device and the receiving entity…This is going to be very long evolving process, I don't expect any breakthroughs in it. And Travis is absolutely right – Re: "…this won’t destroy the credit card companies…" (and read-on the rest of that sentence)..
      Cheers and Good Luck to All

    4. T
      Aug 14 2011, 05:18:10 pm

      sounds like the future. When I worked @ National Semiconductor in the late 70s they were making the scanners/chips that would eventually be used for inventory control EVERYWHERE and friends laughed at the thought of what a barcode would be. My husband’s computer science roommate at UCLA in the late 70s said we would be paying for everything in the future with cards connected to our bank accounts and his friends dismissed him. When I went to a grocery store in Sacramento in the 90s and pulled out my debit card (which I had used in Southern CA for months)I was laughed at and told to stop making a joke……

    5. chris
      Oct 2 2011, 10:55:17 am

      doesn’t the global economy need to recover a wee bit and, indeed, show real signs of sustainability before we talk about technology based on consumption? Call me a luddite but it seems ironic to be looking into a future seriously undermined by the most recent failure of capitalism itself with any certainty. Don’t people need to have money, even digital dollars, to spend it?

      Can one squeeze water from a stone?

    6. chris
      Oct 2 2011, 08:28:47 pm

      They claim to have email etc. encryption that is equal to US Gov. Why is stock doing so bad when all you hear on news is to be aware of hacking your information

    7. C Patterson
      Oct 19 2011, 09:00:15 pm

      I have two diverse, harsh comments, the second for GumShoe’s further anaylsis.
      First, I think this technology will receive favor long term with the US government — since it wants to know everything about us financially and disfavors cash transactions or any privacy, because in its eyes we all are suspect money handlers and money hoarders — hoarders was the term/excuse used when FDR confiscated gold from Americans and six months later devaualted the dollar 41% by decree, changing the gold price.
      Second, NXPI’s debt concerns me in several respects because without debt the company would be so strong the shareholders would not allow it to be sold versus becoming an Intel long term. The CEO’s comment about possibly selling is telling, and contrary to the pitch about its long term value by Motley Fool. Is the debt fixed interest and payable within a few years? At what percent of profits? can it be refinanced now at much lower rates, or are the 2 big shareholders controlling the debt and wanting higher interest? Was IPO money used to pay back debt? Is it convertible to stock at advantageous prices? The Board / CEO would have power to exercise conversion influenced by the 2. Are public shareholders a tool to pay off debt and when it looks prospectively possible from the company till, the big 2 pulll the plug and take the company back private, or sell so the big 2 make their [previously] leveraged 10 or 20 to 1 profit while the other shareholders feel blessed by a double or triple?
      Compare Hertz Corp. which I know about. A year before going provate, the buyers controlled the finances, then as soon as bought with leverage, cloased down most of sales division , making the profit numbers look great – and cutting short many emplolyee benefits. Hertz was then taken public, selling only 28% and holding back 72% by the privateers. AND the IPO allowed the money to be used to pay debt [owed to the privateers [if indirectly] which means they owned 72% for free through such subterfuge. Then, after two years after trashing the sales division, it was reestablished – but Hertz policy denied any longevity of service because such was limited to two years by established policy.
      How many times has this Hertz ruse been used by financially powerful interests to redistribute wealth artificially, and are any such elements present here?

      • 3984 |
        Travis Johnson, Stock Gumshoe
        Oct 20 2011, 10:05:42 am

        I expect that, as with most leveraged buyouts (LBO’s), the IPO money went largely to the buyout firms who had “turned around” NXP, though they may have paid down some debt as well — generally, the backers try to get some money out first since that’s the point of an LBO, load a company up with debt, improve operations, and sell it back to the public markets at a higher valuation than they paid. I tend to be cautious about stocks like this that are loaded with debt then taken public, not necessarily because of a grand conspiracy behind it but because it means the company has less flexibility if the market turns against them.

        I haven’t researched the debt in any particular detail, but the bulk of it is in bonds that have coupon yields of roughly 8-9%, so you could also buy those if you prefer to be a money lender in the business. The maturities are split roughly evently from 2013-2015, so they do have the likely need to refinance substantial debt in a couple years (though they also have plenty of cash flow to meet interest payments, and enough earnings to substantially pay down debt in the coming years if trends persist). It’s not particularly easy to refinance before maturity (you’d have to buy back all the bonds, and issue new ones, which also comes at a cost), and they carry enough debt that the rate might not come down all that substantially even with the lower rate environment.

        I would assume that the private equity backers — KKR, Bain and the like — will probably gradually sell down their equity stakes, which can tend to be a bit of a drag on a stock like this over a couple years unless they show really excellent earnings performance. But that’s about all I know.

    8. JayLeft
      Oct 24 2011, 10:48:01 pm

      I’m thinking this is going to take off real quick. People will love it. Watch the movie “The Transcendanet Man” ,might change your understanding of the increased rapid advances that will occur in technology.

    9. Mormon Mike
      Oct 31 2011, 04:12:28 pm

      I was in Canada last week and saw the technology at work in dozens of places. I don’t know anything about this company, but the technology seems to be literally “coming to a theater near you soon.”

    10. Lilacia
      Nov 1 2011, 11:53:50 am

      I live in Korea (teaching ESL here), and I see that kind of technology every day. Many people just hover their smart phone over the subway scanner to go on the subway here in Seoul. I don’t know for certain if it’s that exact technology though (NFC) or what company is making it. But from seeing this in action here, I can envision the same thing happening back home in the US as well. It’s very much a part of daily life here.

    11. Gary W
      Nov 7 2011, 04:28:30 pm

      A note to sheryar – thanks for the comment on Gemalto. It will certainly be involved in securing payments based on NFC – as they are in most existing payment systems – but they are not like a pure-play on NFC as NXP is. Please reply if you think I have misunderstood Gemalto’s value proposition.

    12. Emmasue
      Nov 10 2011, 11:26:14 am

      If NFC information can be read by units within about 20cm (about 8 inches) seems to me that dishonest employees could simply slip a reader under the counter to capture the information about a customer and could thereafter use it. What are the safeguards with this technology? Could someone with a reader stand beside you in a crowd and capture your ID info as some now can with the current magnetic cards? I have twice had credit card info stolen and have no idea how it was done. NFC doesn’t seem any more secure.

      • Australian
        Dec 9 2011, 07:10:41 pm

        Actually NFC is used in Paywave here, and there have been news stories about scammers scanning bank customers/credit card in queues at stoes. This will be fixed by later versions, but it has been a problem.

    13. Hank
      Nov 16 2011, 10:47:36 am

      Did anybody notice that yesterday (Nov 15, 2011) Third Point LLC (David Loeb’s hedge fund – the one who is quoted in the Motley Fool’s video) totally liquidated its position in NXPI. Time to get out????? DUH! I guess the fact that NXPI has suffered a 50% loss in stock price since May 2011 might be one reason?

      • 3984 |
        Travis Johnson, Stock Gumshoe
        Nov 16 2011, 11:00:23 am

        Interesting, I hadn’t noticed that. He sold a bunch of semi stocks in the last quarter — I don’t know if Loeb was in on the LBO of NXPI before the IPO or not, those are the folks I would have expected to see slowly liquidating their stakes first. He wasn’t among the major LBO partners for the firm, at least. The stock is at a single-digit trailing PE, though analysts seem shy to make forecasts for NXPI right now — a year ago when it was picked by Oscar Schafer for the Barron’s Roundtable (http://online.barrons.com/article/SB50001424052970204331604576104252848553210.html#articleTabs_panel_article%3D2) he thought they’d earn $2.50 in 2011 and $3 in 2012, which would obviously be a lot more than they’ve done so far (last four quarters earnings totaled $1.79). You can argue that NXPI is cheap, but it has certainly been disappointing relative to the high expectations of NFC and the possible iPhone and “Google Wallet” catalysts.

    14. 56 |
      Dec 6 2011, 06:37:25 pm

      “Two third of consumers in Asia region use mobile payment services.” Making such a bold statement here requires source information: “Guest” please verify this claim. We can only use information here if it is credible. This is not Fox News…………

    15. Gow
      Apr 21 2012, 11:56:20 am

      NFC been revolutionized for past 10 ten years or so… anyway, for 10% saving of your car fuel/gas consumption made of 100% plant extracts is quitely making its way and explosing in China right now… for USD 5, 420L or 92 gals. to save 9.2gals, assuming $1.5 gas/gal, you gained ~$8, or almost twice your returns for the amount you spent! email: hgow@yahoo.com to get your sample shipped!

    16. Marco
      May 5 2012, 12:38:00 pm

      I live Hong Kong.
      In HK, since 2000, every citizen has a NFC card (work like a debit card) to pay for subways. food, and everything.
      but it has a limit on US$30 per transaction. so you will not worry someone steal your money from the card by waving the reader near your wallet, as at most they can only steal US$30.
      Since then, people seldom use cash if the store accept the NFC card.

      NFC in phone will surely be a success. but I just dont know if it will reflect on NXPI. That NFC chip is not rocket science. I guess many company knows how to make it.

    17. Myron Martin
      Myron Martin
      May 11 2012, 12:40:03 pm

      Missed this one due to a glitch in delivery for several months so maybe this will start a new thread as what interests me has not been covered very much. Irrespective of the merits of any stock mentioned, this could become a major social issue. While the government is pushing things like safety, ease of use, possible savings on transactions, elimination of tax cheating etc. I suggest the REAL objective here is really TOTAL CONTROL!
      Due to money laundering concerns, CASH is on the chopping block, and identify theft using credit cards is also a problem, so IF the powers that be can convince the masses the “DIGITAL MONEY” is the way to go then it would also solve problems like the cost of producing pennies and nickels being higher than their face value. It could also be used to discredit a “gold standard” as it would not be practical to carry gold and silver coins to say nothing of the problem of making change, and increased danger of theft.
      I am sure there must be some Bible readers among the Gumshoe subscribers, so I am surprised that nobody has brought up the prophecy in Rev. 13:17 as the Amplified Bible puts it; “no one will have the power to buy or sell UNLESS he bears the stamp, (mark, inscription) of the Beast, or the NUMBER of his name.” Having had some past contact in various religious circles, I am aware that there has been a great deal of “speculation” by evangelicals in particular that this is referring to an implanted chip which has already been used for tracking animals, and some years ago advanced as a way to find lost children etc.
      Many FEAR the “Mark of the Beast” but I would suggest this does not have to be an implanted chip with all of its implications, it could be as simple as traditional payment methods becoming illegal, CASH and credit cards obsolete, gold and silver solely in the hands of government, not allowed to be owned by citizens, and the ONLY WAY to do transactions officially would be by digital money that would obviate privacy and deny traditional freedoms now under assault by government bureaucrats, everything would be known to government snoops. In other words this prophecy could easily be fulfilled by advances in technology that will be SOLD as beneficial to mankind as a whole, and even necessary for the survival of civilization, but need I cite examples of politicians passing laws that even now get abused and deny human rights with ever more stringent laws to force people to conform to government edicts designed to enrich the elites and enslave the masses?

      • Jonathan
        Jun 9 2012, 10:17:49 pm

        Very well said. The same verse was brought to my remembrance as I was reading this article (“No one will have the power to buy or sell unless he has bears the stamp or mark of the Beast.”). I imagine that this NFC chip technology is only the first wave. With a NFC chip located within your smartphone the same possibility exists of losing your hard earned government credits to thieves who will then scan and spend your money the same way they would spend your cash or swipe your card. The “ultimate solution” to this problem would be, as you already know, to implant the smart chip with NFC within your body so as to eliminate the possibility of ever losing your wallet or smartphone again to thieves and to make life easier, no more clunky wallet in your pocket, no more change falling out of your pocket when you sit down, etc. Remember, the government is your friend and only wishes to provide sensible solutions to make life easier for everyone…besides, it’s for your own safety. In the just the same way technology can be a great asset and tool in the right hands, it can be just as deadly in the hands of those with the wrong intentions, namely the top elites who own the politicians, major corporations , oil and agriculture industries, wall street, and others. As the healthcare insurance industry is crumbling to eventually make way for the government to save the day with social healthcare they aim to do the same in all aspects of life. The LOVE and inordinate affection for money and power has and always will corrupt people. There is nothing new under the sun, many world leaders, “kings,” of this world still have the same goals as always, to make themselves rich and to enjoy their lavish living, usually at the expense of the citizens or subjects of the country/kingdom. We in the west have only been blinded by this history because we have tasted a republic/democratic society here in the US for almost 250 years that has allowed many to taste freedoms and privilege that prior to this point only existed few and far between throughout time.
        To make a long post short, yes I believe this is just the first stop on the way to the “mark of the beast.” History always repeats itself. Even in the US we will experience harsh government rule compared to what we have known up to this point. The Bible prophesies it along with many other things that have all come to pass and many that are still yet. Thank God that he is not a man that he should lie. This will not be a surprise to those who wish to see the truth about things. God provides even in desperate circumstances. Just look at Moses and the rest of the Israelites in the desert whom God made manna and food appear for them. If he could do it then he can surely do it in a cashless society where once again food may be scarce or at least scarce to those who wish not to participate and swear their life away for basic necessities in the future. I know it is extremely politically incorrect to say these things but it is still the truth. Trusting in man and money (though we must use money and live in this world) never works only trusting in God and Jesus as our savior is the only safe haven, thankfully this becomes more apparent in dire circumstances.

      • Linnea Bates
        Oct 29 2013, 11:04:09 am

        I am a COMPLETE newbie to investing (or even researching on how/what to invest IN), so I don’t even pretend to come here with some huge font of new wisdom, but it seems to me that although there will be many believers in the fact that this all seems to be leading towards Big Brother being able to keep their eyes on our pursestrings, (myself included), it does not mean that many won’t use the technology anyways simply because it’s more convenient. I most certainly have been neither cautious nor concerned about anything like this, because I don’t buy anything outrageous, and I don’t have a bunch of cash anyways so they’d probably be bored to tears studying my spending habits, but I think that if the government cared to look into your finances, they can darn well do it with or without this technology; this just makes it easier, quicker, and probably more widespread. Bottom line, I think somehow, this technology makes sense from at least an investing standpoint. Not endorsing anyone in the game at this point (and who cares WHO I endorse, since I really know squat! 🙂 ), but looks like at some point, this will bring a group of people who were wise enough to get educated, some cashola!!!!!

    18. Brumo
      May 26 2012, 06:41:04 pm

      LOEB may have sold chunks of SEMICONDUCTOR companies to put into YAHOO… he seems to be somewhat obsessed with that company.

      What about Veriphone (PAY)….. they are a player in this genre…

    19. John
      May 28 2012, 03:12:26 pm

      I wouldn’t trust anything that has the KKR touch. My learning came from a go around when they took OI private. The process became apparent. Downsize employees and take “excess contrbutions” to pension funds, strip tangible assets (forest lands) wait a couple of years and milk the goodwill of a company not the same, but loaded with debt and marginally funded pension obligation. How does this help stockholders? Kkr buyout price was lower than longer term holders.
      (Please excuse the tag to an old post……)

    20. Geo
      May 28 2012, 07:04:01 pm

      I realize this is a comment and not a recommendation but in response to 2/3rds use of mobile payments services…..I call BS on the electronic payment by wipe/mobile in SE Asia…..I live here on a day to day basis. Get out of the expat and tourist regions and everything is done, I mean everything is done by cash. I will not even use a credit card due to the fraud here. The vast majority and I mean the vast majority will not use any form of “money” that is not money. In Ameriduh people do pay with credit cards, debit etc. my oh my look at the debt they are in. In addition, americans pay the most for the least, always. Case in point, I purchased a weeks round of antibiotics for a minor infection….ran me oh .50 US. Gonna swipe that one? DVD’s another huge spendy item…….. .50-1.3 US Why the heck would any business dealer carry the weight of the fees? I shop were they do not pass excessive government/business costs onto me. Easier to blackmarket….and oh they do and will…..only the dumb ones pay for alleged “convience”

    21. GGA
      May 30 2012, 02:15:02 pm

      Hi travis,
      I just became a premium member. Could you please comment on Elliott Gue, 5/29 teaser “Horizontal drillers can not operate without it”
      I think the producer is U.S. Silica Holdings, Inc. Your comments on this company will be greatly appreciated.
      Many thanks,

      • 3984 |
        Travis Johnson, Stock Gumshoe
        May 30 2012, 02:40:14 pm

        Thanks! Haven’t read that one yet, but it’s on the pile — maybe you’ve beat me to the punch! I’ll write it up if I find something interesting, hopefully soon.

      • Myron Martin
        Myron Martin
        Aug 13 2014, 03:59:27 pm

        What they are referring too is “frackng sand” of which U.S. Silica Holdings is the principal producer. The premise is that with the shale revolution there will be thousands of wells drilled that require frackng for maximum production.

    22. Biff Jones
      Jun 3 2012, 02:23:19 am

      NFC sporting cell phones, have been in the works for a long time. We were working on the security aspects in standards bodies back in 2007. We even started looking at using NFC for other things. I don’t think the hardware is a big deal. Again it will be the company that locks up its use….it will be another way to use your credit card…same companies.

    23. Walter Prochorenko
      Aug 9 2012, 07:03:39 pm

      One year later – almost to the day – Fortune resurrects “The Death of Cash” and Motley Fool jumps on the bandwagon with e-mails and web drama about how this will put millions in your pocket (by taking billions out of it). Long live “Phone Swipe Pay”.

      • 1980BigIPO
        Oct 29 2013, 04:11:54 pm

        It is now TWO years later…seems like Motley Fool is a spam farm to me.
        Seems most stock analysts in modern times have this “investment strategy”; rehash old investment strategies as new every few years.

    24. C. Cook
      Jun 13 2013, 05:10:12 pm

      Anybody know the name of a company that will develop (is developing) SECURITY so thiefs can’t steal info. off your NFC wallet while your walking around in a Mall???

      • 30 |
        Dec 5 2013, 02:42:06 pm

        C. Cook,
        Security can be approached several ways. 1. By software directly tied to the app, or the app itself, blocking or limiting signal traffic to the specified target.
        2. Biometric security. This is what I think will be the near term solution. Co’s such as IWSY, AWRE, and a few others which will require you to sign in and out to use the app.
        Biometric signature, ie. finger, eye & voice recognition seems to be the booming market security answer. Passwords are so passé now a days and can be hacked by 12 yr. olds.
        Biometrics, on the other hand, are quite safe if you lose your smart phone.

    25. bpowers
      Dec 5 2013, 01:17:21 pm

      Watched someone scan their phone at Starbucks recently and thought “that’s a great way to handle debit.” On the other hand, I’m not too crazy about my phone wirelessly transmitting payment in public places. Somehow the scan code feels more secure even though it probably isn’t. Perception is half the game; is their a way to invest in the technology I saw at Starbucks? Thank you in advance!

    26. Lara
      Aug 12 2014, 01:03:36 pm

      Motley fool has a new teaser out again, that sounds the same… Is it for NXP again, or something else? Please investigate! Here’s the teaser:

      If you’re a believer in investing in megatrends like 3-D printing, don’t miss this.
      The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. A new presentation reveals the full story on why your credit card is about to be worthless — and highlights one little-known company sitting at the epicenter of an earth-shaking movement. Its stock is up more than 100% over the last year, but it’s still early in the game. Click here for full details.

    27. Lara
      Aug 12 2014, 01:04:42 pm

      here’s another new teaser from Fool, that sounds just like this old one… is it NXP again? Please investigate! ”

      If you’re a believer in investing in megatrends like 3-D printing, don’t miss this.
      The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. A new presentation reveals the full story on why your credit card is about to be worthless — and highlights one little-known company sitting at the epicenter of an earth-shaking movement. Its stock is up more than 100% over the last year, but it’s still early in the game. Click here for full details.

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