In an industry that is constantly changing and developing, one thing has remained constant in the oil and gas industry: pricing. In recent years, we have seen a shift from cash to Flow to provide more stability for investors. However, this trend may be coming to an end thanks to new developments from Meta Financial Group Incorporated (NASDAQ: CASH) This company has recently announced that it will now integrate its retail banking services into its subsidiary MetaBank. This would mean that consumers at one institution could enjoy both their banking as well as the leverage of the investment opportunities provided by another. This new service is a joint venture between MetaBank and Citizens Bank which includes both their lending and deposit products in the package. The idea is to provide investors with a tool that can be used to get their money into asset-backed notes, CDOs, and other collateralized debt obligations. MetaBank currently has over 2 million customers with a total balance of $27 billion. This figure comes from its combined consumer loans, deposits, and investments including a roll-up of other institutional clients such as retirement plans, hedge funds, and private equity firms. The fees associated with the services offered through MetaBank are also kept to low levels so that they remain attractive to investors.

What is Flow and why is it rising?

Flow has been the favored type of investment by investors in recent years. It is more stable since it doesn’t rely on stock market fluctuations to be successful. This stability is also because these notes have been tied to tangible assets such as real estate, oil and gas properties, or agricultural land. This can also be attributed to the low-interest rates provided by conventional banks making bonds appear more attractive. Flow has become so popular that even companies not directly involved with oil and gas were able to get in on the action. Examples would include stable retail names like Wal-Mart Stores Incorporated (NYSE: WMT) and Colgate-Palmolive (NYSE: CL). The interest gained for corporations has been attributed to the success of flow investment in the oil and gas industry. In the last year or so, many new investments have been made. One of such companies was Southwest Energy Services, Incorporated (NYSE: SWN) which provided a flow note on a property just south of Dallas, Texas, and is known as Richfield Springs. Furthermore, it was also rolled up with other local energy-related companies to provide a much wider distribution.

#bitcoin stock-to-flow model predicts $100K by Christmas, time model (diminishing returns, lengthening cycles) $30K. Next months will be key. Note that color overlay is on-chain signal (not time to halving), indicating we are between bottom (blue) and top (red), in line with S2F. pic.twitter.com/OS0pAKduq4

— PlanB (@100trillionUSD) August 27, 2021

Brace for a Pullback After Meta Integration

The problem with the flow is that it is still reliant on the performance of the underlying asset to be successful. In the case of oil and gas, this would mean that there must be an active drilling program in operation for it to succeed. Unfortunately, we do not see many companies who are eager to initiate new drilling programs and instead prefer to focus on hedging their deals with forwarding contracts. This would also mean that many investors will not feel comfortable about purchasing flow notes. Another thing that is seen as a detriment among investors is the lack of transparency when it comes to this type of investment. This is because no one knows the performance of these notes and it can be hard to verify whether or not they are doing well. This makes it difficult to safely invest in this type of product and there is also a greater risk of fraud.

Meta’s Plans for Growth with Flow Investments

A common misconception about flow investments and how they are made is that they are a relatively straightforward process. This couldn’t be further from the truth, though it can happen if you know what you are doing. The process seems straightforward enough, but if you don’t know all aspects of the investment, there are numerous pitfalls that you can fall victim to. A good example of this is when a company that is selling flow-related products did not disclose all the risks involved. This shows the importance of fully understanding the risks and challenges associated with these investments before you start using them.

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