For anyone watching the market this morning, Earlypay Ltd [ASX:EPY] may have caught their attention.
With no major announcements or news to speak of, the stock jumped more than 16% out of the gates. A strong move for a tiny stock that may simply be chalked up to momentum.
But, there may be more to it than that…
Remember the Reddit trading army of Wall Street Bets? Well, there is an Australian equivalent — known simply as ASX Bets. And one post made today could be behind Earlypay’s recent surge.
Has the Reddit pump reached Australia?
Four hours ago a post on the subreddit ‘ASX_Bets’ was made. It was titled:
‘My last DD up 300% in record time. Here’s my next 1000% bet: EarlyPay (EPY) DD’
Accompanied with this bold title was a link to a Google doc. Inside of that doc was some rudimentary analysis on Earlypay’s financials and comparisons to notable fintech competitors.
Suffice to say, the user who posted this ‘due diligence’ was outlining his rationale to go long on Earlypay. Suggesting that it is heavily undervalued compared to the rest of the sector. Adding that it could ‘catch BNPL stonk momentum’.
A call to arms as it were to get his fellow users to jump aboard the investment with him. With a range of users offering up jeering comments or tongue-in-cheek approval. Whether any of them have actually invested in the stock though, is impossible to tell.
And, given the fact this post was made after the surge at the open, it may not have had much sway at all. Or, it could be due to the fact that the original poster bought in early, and has since tried to convince a few more users to join him.
Either way, all we have to go on is speculation.
So, while the post may be purely coincidental, it does make for a fascinating story. One that could hint at the possibility of more Reddit pumps in the future.
And for existing Earlypay shareholders, they certainly aren’t going to look a gift horse in the mouth.
What’s really going on at Earlypay?
As for the company itself, well technically it isn’t even a BNPL stock. Though I assume this user is expecting any ‘fintech’ related company has the potential to get swept up in the tangential hype.
Instead, Earlypay works with businesses not consumers. Providing financial and technology assistance to help with cash flow, bookkeeping, and trade invoices. A company that up until November was known simply as CML Group.
So, in that regard, the Reddit user is correct in the sense that Earlypay is looking to capitalise on the recent fintech boom. Adopting a hip name that is in line with most of the other major brands.
As for their long-term potential though, well it is tough to say. We’ll have to wait and see if the Reddit army gets right or wrong on this one.
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For Money Morning