Freedom Holding Corp. held a press conference in NYC on October 14, where the management talked about the way the company had made to the listing in the NASDAQ, as well as about the plans after the trading started. The reporters had a chance to ask Timur Turlov all relevant questions.
Timur Turlov, Askar Tashtitov, and Evgeniy Ler
In the first part of the press conference, Timur Turlov (CEO), Askar Tashtitov (President), and Evgeniy Ler (CFO) talked about the key stages the company had to come through in order to get listed on one of the largest global exchanges.
"Getting listed and becoming a publicly traded company was a goal we had been working to achieve over the last six years", Mr. Turlov says. "We had to complete a few tasks at the same time, including structuring, legal basis, and putting the entire business together. This was a great challenge that showed we could be as transparent as the largest US-based corporations. Reliability and transparency are as much important as innovative techs, good pricing, or investment ideas we are offering to our clients."
Apart from technical and financial requirements, going public also means additional costs for any company. "Being a publicly traded company in the US is expensive. These conditions are created by the regulators on purpose, so that only trusted and high quality businesses can access those privileges. I also must admit getting listed is impossible without having highly qualified professionals in our team. I'm now speaking not only about those who manage the business in each country of presence, but also about those who were in charge of legal and compliance here in the US", the holding's CEO said.
Audit and verification was an important topic as well, as the NASDAQ had always had very high requirements, especially when it comes to high-risk regions of the globe. "We faced a good deal of verification, as the local authorities are very thorough in checking the reputation risks, the client base, the region-based risks, and so on. We have managed to provide the required reports and confirm our reliability. We were perhaps even faster in this than some other companies, but the effort invested into it was unrivaled."
A large way still lies ahead of the company, as the public status and the listing on the NASDAQ offer a medley of opportunities for raising cash in the US market. The responsibility regarding both the clients and the shareholders is also larger, though.
Reporters from Russia, the US, and Kazakhstan took part in the press conference
Freedom Holding Corp. shares have now become available to the US-based retail investors. The company is working to provide the non-qualified investors from other countries with the access to the shares as well. In Russia, the company is planning to get listed in the Saint Petersburg stock exchange.
After getting listed on the NASDAQ, we of course expect our assets to become more liquid, while the trading volume of FRHC shares should also get boosted. Two years ago, when we run private placement in the US, we were able to raise around $40M, which was a great starting point for our growth here. Our business is now making good progress, with all the financial figures being better and better year after year. Our last report showed the net profit at $8M. This is a very exciting moment for all of us. We've been long dreaming of it and have done a lot to achieve it", Turlov concluded before the first part was over.
During the second part, the reporters, both attendees and the ones that used a dedicated phone line, were able to ask their questions to the speakers.
While speaking on the listing and the IPO, Timur Turlov highlighted that Freedom Holding Corp. had already been trading in the ОТС Markets, which should be taken into account. "Neither the company nor the current shareholders sell their shares during the IPO", he said. "We have quite large free float, so it's more about uplisting: we're switching from the OTC markets to an exchange."
The reporters were also interested in how the company was planning to develop its business in its countries of presence, and what the strategy for expansion to the new markets was.
"We are not just aimed at the extensive growth", the CEO answered. "Quite the reverse: we are focused on our performance and on integrating all parts of our business into a single structure that would boost the productivity across all locations. This is actually an internal process, and a part of it can never be bought for cash. Some interesting opportunities may appear in the markets, but, again, we're focused on internal processes. Practically, working with other market participants is not always possible." FRHC will, however, be expanding geographically, especially in Europe, where only Germany and Cyprus are already covered.
Timur Turlov, CEO at Freedom Holding Corp.
Whether an offline or online business development model is to be considered the best for Freedom Finance, was a good question to Timur Turlov. Offline strategy was picked because investment services often require individualized approach, which is nearly impossible when working online. "Investment is a complicated product, and the clients do often need someone who will guide them though the stock market", the CEO said. "This is why we have so many personal account managers, around 600, which is nearly 50% of the total number of FRHC employees. This is a global trend, such strategies have also been adopted in the US. We will do our best to become more "digitalized" and "lightweight", but this is only one of the many niches available."
In conclusion, the speakers were asked about business in Kazakhstan and Ukraine, where Freedom Finance acts as a market maker and does a lot for stock market infrastructure development. Here, the key sectors are investment banking and cash raising through stock market instruments, as the FRHC management admit.