The Ioupay Ltd (ASX: IOU) share price is in a trading halt today. So why is this happening, especially with such a new entrant to the ASX boards?
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What does IOUpay do?
IOUpay is one of the latest entrants into the increasingly-crowded payments space on the ASX. This sector was pioneered by the now-famous buy now, pay later (BNPL) company Afterpay Ltd (ASX: APT) a few years ago. But Afterpay has since been joined by Zip Co Ltd (ASX: Z1P), Sezzle Inc (ASX: SZL), Openpay Group Ltd (ASX: OPY) and a couple of others in seeking the riches of this new payments space. Even some US giants like PayPal Holdings Inc (NASDAQ: PYPL) and American Express Co (NYSE: AXP) are getting in on the action as well.
So IOUpay only debuted on the ASX a few weeks ago (21 September to be exact) and caused quite a stir when it rocketed 44% on IPO day.
It's a fintech company which provides digital commerce software solutions and services. The company's technology enables institutional clients to extend their digital platforms to any mobile device and integrate mobile technology throughout their existing business. In addition, they can authenticate end-user customers and process financial transactions securely using any mobile device. According to IOUpay, it aims to be "one of the leading digital transaction processors in the booming cashless economies of Southeast Asia".
Why the trading halt today?
The company hasn't said too much about its halt, other than telling investors that it is "pending the consideration of a capital raising". A capital raising is where a company seeks to raise money, either for expansion purposes or to get it out of a pickle (such as potential bankruptcy).
Companies' usually raise capital by issuing new shares to the market. If a company's share price is relatively high, it increases the level of funds a company can seek in a capital raising for each new share issued.
The current IOUpay share price remains a good 178% above its initial public offering (IPO) price and gives the company a market capitalisation of $71.87 million.
We will have to wait for now to see the specifics of the capital raising.
