Why the IOUpay (ASX:IOU) share price is charging higher today

The IOUpay Ltd (ASX:IOU) share price rocketed as much as 14% higher this morning after returning from a trading halt…

| More on:
excitement surrounding asx share price rise represented by man holding slip of paper and making happy, fist up gesture

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The IOUpay Ltd (ASX: IOU) share price has returned from its trading halt and is charging higher.

The Malaysia-based buy now pay later (BNPL) provider's shares were up as much as 14% to 80 cents at one stage.

However, the IOUpay share price has now pulled back notably from there and is currently up 3.5% to 72.5 cents.

Why is the IOUpay share price charging higher today?

This morning IOUpay returned from its trading halt following the successful completion of a $50 million placement to sophisticated and institutional investors.

According to the release, 100 million shares were offered to investors at 50 cents per share. This represents a 28.6% discount to its last close price of 70 cents.

Management advised that the placement received strong investor demand far exceeding the placement limit agreed by the company. It also secured strong support from new and existing sophisticated, local and international institutional investors.

To put this placement into context, at the start of 2021 IOUpay had a market capitalisation of $74 million. This is based on an IOUpay share price of 19.5 cents and its shares outstanding of ~380 million.

This means that through this placement the company has raised over two-thirds of its market capitalisation from just six weeks ago.

Why is IOUpay raising funds?

Management advised that the proceeds will be used for growth initiatives including digital payments and to accelerate new business development opportunities in the BNPL sector in South East Asia. Funds will also be used for working capital purposes.

IOUpay Chairman, Aaron Lee, commented: "The Company is delighted to see the market respond so strongly to our plans to accelerate our market position as a leading operator in the digital payments and BNPL sectors in South East Asia."

"This capital raising represents another important milestone in our roadmap to expand our existing and new product offerings and accelerate the growth potential of that expansion. We welcome all new shareholders and thank our existing shareholders for their continued support for this exciting new next chapter of IOU which combined with existing cash reserves provides us with a strong capital platform to execute our market validated business plan," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Share Gainers

Why Bega Cheese, Domino's, Lovisa, and Universal Store shares are rocketing today

These ASX shares are catching the eye on Thursday. But why?

Read more »

A smiling man at a shop counter takes payment from a female customer, with racks of plants in the background.
Share Gainers

The Wesfarmers share price is rising again. Should I buy the stock now?

The conglomerate reported warmly received results last week and announced a large dividend.

Read more »

Shot of a young scientist using a digital tablet while working in a lab.
Share Gainers

If you'd put $20,000 in this ASX healthcare stock during COVID-19, you'd have $257,000 now

You could have become filthy rich in just 4 years. Just think about that.

Read more »

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.
Share Gainers

Why Codan, Domino's, Lottery Corp, and Wisetech shares are storming higher today

These ASX shares are avoiding the market weakness today. But why?

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a mildly negative session on the stock market this Tuesday.

Read more »

Man pointing at a blue rising share price graph.
Technology Shares

Guess which beaten-up ASX 300 tech stock is rocketing 15% today

This once much-loved tech company has lost 98% of its value over the past three years.

Read more »

a woman holds her hands up in delight as she sits in front of her lap
Share Gainers

Why ARB, Bravura, Hub24, and Suncorp shares are storming higher

These ASX shares are having a strong session on Tuesday. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

2 rocketing ASX shares you need to think about getting on board

Just because a stock has surged already doesn't mean it can't do so in the future.

Read more »