IOUpay Shares in Trading Halt (ASX:IOU)

The IOUpay Ltd [ASX:IOU] share price is in a trading halt pending the announcement of a ‘material investment/acquisition’ related to the BNPL business segment.

This trading halt will remain active until the announcement is released to the market.

The IOU share price moved strongly earlier this year on their initial BNPL move.

ASX IOU 0 IOUPay Share Price ChartSource: Tradingview.com

 Despite falling off after that move, IOU shares are still up over the course of 12 months by 520%.

BNPL update

 The myIOU BNPL service was launched at the end of the June quarter, and the company announced that it has seen $3.5 million worth of transactions processed through the service.

 Approximately $2.9 million worth of purchases took place between 1 July and 16 August, and nearly $0.58 million took place in June through myIOU.

 The net transaction revenues for the company stood at $299,079.

The myIOU app was also launched on both the Apple App Store and the Google Play Store platform.

 Since the launch, 1,492 merchants signed onto the service, while the number of downloads for the myIOU app was 7,372.

In addition, 5,034 customers were onboarded, and 1,948 customer account activations were seen as of 16 August.

IOU announced in the June Quarterly Report that the testing of Razer Merchant Services (RMS) and IOUpay systems was expected to be completed by early August.

However, due to level 4 lockdown conditions in Malaysia, the testing phase has been extended until early September.

Once the testing is completed, a pilot group of merchants will go live with full implementation to be activated on a schedule agreed with RMS.

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What’s next for IOU shares?

 IOU is investing heavily in its BNPL business segment.

The company has initiated a ‘sophisticated’ digital marketing strategy that will target key cultural demographic groups throughout Malaysia and will approach social media influencers.

Using a left-field marketing tactic, the company has announced award-winning international singer-songwriter, Yuna, as the ‘Face of myIOU.

 The company says this move is aligned with the company’s digital marketing strategy across Malaysia where the myIOU BNPL service has been launched.

As of their most recent financials, they had $51 million in cash, which could be considered healthy given a current market cap of $170 million.

Hence the acquisition move today.

With existing revenues to build upon, quarterly revenue for the period ending 30 June stood at $1.7 million.

However, the company reported a net loss, which was down 89% to $4.9 million and can be attributed to the investments IOU is making in the BNPL segment.

Some investors would baulk at those numbers, but with the solid cash position in hand, it’ll be fascinating to see what the investment/acquisition is.

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They unveil three promising fintech stocks: an innovative firm that has brought Afterpay’s BNPL model to professional services, a cutting-edge digital payment platform, and a software company helping businesses to make smarter decisions.

Definitely check that out.

 

Regards,

 

Kiryll Prakapenka,

For Money Morning

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Kiryll Prakapenka is an investing autodidact who is passionate about conducting in-depth research on investments. Kiryll brings sound analytical skills to his work, courtesy of his Philosophy degree from The University of Melbourne. A student of legendary investors and their strategies, Kiryll likes to synthesise macroeconomic narratives with a keen understanding of the fundamentals behind companies.


Money Morning Australia