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Pushpay (ASX:PPH) founder to dump entire 9% stake

Digital tithe merchant Pushpay Holdings Ltd (ASX: PPH) is in a trading halt this afternoon after it revealed that its co-founder, exectutive director and sales executive Eliot Crowther is to sell his entire 9% holding in the company that amounts to more than 24 million shares.

The sell down in the Auckland founded company that is also listed on the NZX is fully under written to the tune of NZ$99.2 million, with shares reportedly being shopped around at NZ$4 on an 8% discount to the last traded price on the NZX.

Pushpay’s ASX scrip has climbed from $1.59 in June 2017 to $4.01 today, which means the value of the co-founder’s stake is up 150% in just over a year.

The company stated that the co-founder was getting out for “family” reasons, although the market may not react well to the decision to sell his entire holding, with the stock due to come back to the boards on June 20.

The software business that acts as a digital middleman between church congregations and churches in collecting tithes also revealed it does not intend to proceed with plans for a U.S. listing. Effectively stating that this was because it felt liquidity amongst its local listings was now sufficient to preclude the need for a US listing.

Pushpay’s meteoric rise has been based on its ability to double revenue to US$70.2 million for its financial year ending March 31 2018, with guidance for the group to deliver revenue between US$20 million to US$22.5 million for the quarter ending June 30 2018. It has also forecast reaching cash flow break even with calendar year 2018.

I’m not especially keen on Pushpay’s business model or outlook, but its rampant growth and share price rise seemingly speak for themselves. The next 12 months could bring volatility in the share price as this software star looks to demonstrate its the real deal in terms of long-term potential.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

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The Motley Fool Australia owns shares of PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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