IOUpay Share Price Up on Results Release (ASX:IOU)

By Lachlann Tierney, Monday, 01 March 2021

The IOUpay share price [ASX:IOU] is up nearly 10%, trading at 62.5 cents. After a brief retracement, the IOU share price is moving higher again today. After the half-year reporting period, IOU did a big capital raise — to the tune of $50 million...

At time of writing, the share price of IOUpay Ltd [ASX:IOU] is up nearly 10%, trading at 62.5 cents.

After a brief retracement, the IOU share price is moving higher again today:

Source: Tradingview.com

We look at the key points from IOU’s latest results and the outlook for the IOU share price.

Highlights from IOU results

Here they are:

Net loss of $1.1 million
Revenue of $2.8 million
Cash and cash equivalents of $8.5 million

Importantly, after the half-year reporting period, IOU did a big capital raise — to the tune of $50 million.

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So, the company has a bit of a war chest available to it for its Southeast Asian expansion plans.

The Australian Financial Review’s Street Talk column initially said the company was hunting a $40 million cash injection, which we now know is actually $50 million.

As part of their platform launch, compliance and professional fees expanded rapidly from roughly $253,000 to over $1 million.

As with any new product launch, getting the product off the ground involves a fair bit of legwork and expenditure.

Here’s what I think could happen to the IOU share price.

Outlook for IOU share price

With an increasing number of ASX-listed BNPL companies out there, IOUpay’s success will be determined by how well they carve out their niche.

While there are BNPL behemoths out there like Afterpay Ltd [ASX:APT], IOU will be looking to cement its place in its target market and grow its market share, particularly in the e-commerce space.

I covered my thoughts on IOU in the video below, and it’s well worth a watch:

Steady news flow, a mammoth capital raise, and a niche market may have investors bullish about its prospect.

At the same time however, it’s conceivable that we are approaching market saturation when it comes to BNPLs.

If you are on the hunt for more fintechs with significant growth potential, be sure to download this particular report on the topic.

In the report, you’ll find profiles of three exciting small-cap fintechs that have yet to completely take off.

With so much hype in the fintech space at the moment, it’s well worth a read.

Regards,

Lachlann Tierney,
For Money Morning

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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Lachlann Tierney

Lachlann ‘Lachy’ Tierney is passionate about uncovering hidden opportunities in the microcap sector. With four years of experience as a senior equities analyst at one of Australia’s leading microcap firms, he has built a reputation for rigorous research, deep-dive due diligence, and accessible investor communications. Over this time, he has vetted seed, pre-IPO and ASX-listed companies across sectors, conducted onsite visits, and built strong relationships across the microcap space. Lachy is nearing completion of a PhD in economics at RMIT University, where his research focuses on blockchain governance and voting systems. His work is housed within the Blockchain Innovation Hub at RMIT, a leading research centre for crypto-economics and blockchain research. He holds a Master’s degree from the London School of Economics and an Honours BA in Philosophy and Politics from the University of Melbourne. Born in New York and raised in California, Lachy grew up a few blocks from biotech giant Amgen and counts among his peers various characters in the overlapping worlds of venture capital, technology and crypto. When he’s not researching microcaps, he’s most likely sweating it out in a sauna or dunking himself in cold Tasmanian water.

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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.