Why the Openpay (ASX:OPY) share price is sinking 8% lower today

The Openpay Group Ltd (ASX:OPY) share price is on the move on Wednesday after returning from its trading halt. Here's what you need to know…

| More on:
Zip share price man hitting digital screen saying buy now pay later

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 Openpay Group Ltd (ASX: OPY) share price has returned from its trading halt and is sinking lower

At the time of writing, the buy now pay later (BNPL) provider's shares are down 8% to $2.22.

Why was the Openpay share price in a trading halt?

Openpay requested a trading halt on Monday so that it could arrange a major funding package to accelerate its international expansion.

This morning the company revealed a $67.5 million funding package, which comprises a $37.5 million placement, a $25 million corporate debt facility, and a $5 million share purchase plan.

In respect to its placement, the company raised the funds from new and existing institutional and high net worth investors at $2.03 per new share. This represents a 15.8% discount to its last close price.

The share purchase plan will be undertaken at the same price.

What now?

The Afterpay Ltd (ASX: APT) rival notes that this funding package will support the major partnership it announced this week with global payments provider, Worldpay from FIS.

This partnership will see the two parties collaborate to offer flexible BNPL payment products and other solutions to merchants and customers in territories in which Openpay operates. Though, the company's immediate focus will be on the lucrative US market.

Openpay's Managing Director and CEO, Michael Eidel, commented: "Earlier this week Openpay achieved a major milestone, securing an agreement with world-leading payments provider, Worldpay from FIS. Through this relationship, we will endeavour to offer Openpay's 'Buy now. Pay smarter.' payment products to FIS merchants, initially focused on targeted verticals in the US and using FIS as a merchant acquirer, based on the integration into their payment gateway. This marks a core achievement in Opy USA's six-pillar US entry strategy."

"The funding package announced today will provide valuable funding for the integration and launch of the agreement with Worldpay from FIS, as well as other recent wins, and support the close of other agreements in our deal funnel across Australian, UK, and US markets. The window of opportunity for our differentiated 'Buy now. Pay smarter.' approach is open right now. We are moving with urgency through this inflection point, and expect deployment of this funding to lead to a step-change in business performance."

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

More on Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why 29Metals, Brainchip, Platinum, and Premier Investments shares are falling today

These ASX shares are having a tough time on hump day.

Read more »

Man with his head in his head because of falling share price.
Share Fallers

Why 29Metals, Atlas Arteria, IDP Education, and Mineral Resources shares are falling

These ASX shares are having a tough time on Tuesday. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ALS, EOS, NRW, and Patriot Battery Metals are dropping today

These ASX shares are starting the week in the red.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why AGL, Brickworks, IGO, and New Hope shares are dropping today

These ASX shares are having a poor session. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today

These ASX shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling

These ASX shares are having a poor session. But why?

Read more »