The IOUpay Ltd (ASX: IOU) share price, up 1.28% today, trading at 40 cents per share. Despite the intraday gain, shares in the ASX fintech company are now down 44% from the 15 February highs when it closed at 70 cents per share.
Still, even after that retreat, IOUpay is trading at more than 5-year highs. Shares remain up 98% so far in 2021 and up an eye-popping 3,850% over the past 12 months. Over that same period, the All Ordinaries Index (ASX: XAO) is up 38%.
And, as Bloomberg notes, despite the recent share price retreat, “IOUpay remains Asia’s top-performing interactive media and services stock over the past year”.
What’s driving ASX investor interest in IOUpay?
The IOUpay share price has been buoyed by a number of factors over the past months.
The ASX fintech company capitalised on the massive investor interest in buy now, pay later (BNPL) shares, like Afterpay Ltd (ASX: APT).
The IOUpay share price surged in February after the company entered into a merchant referral agreement with EasyStore Commerce. The agreement allows EasyStore’s clients to use IOUpay’s BNPL payment services.
Retail traders communicating and coordinating their activities on Reddit have also been widely credited with IOUpay’s meteoric rise. That’s the same group of traders that sent the GameStop Corp (NYSE: GME) share price to the moon, burning a number of institutional short sellers in the process.
As Bloomberg reports, IOUpay’s huge daily share moves began “after it was touted by investors on Reddit”, adding that the ASX fintech share “has been the subject of several discussion threads on Reddit”.
Will a retreating Reddit army sink the IOUpay share price?
As the world begins to recover from the viral lockdowns, the hoard of retail traders appears to be turning their attention, and their money, back towards the pursuits they’ve been denied this past year. Like travelling, dining out, and returning to work in the office.
And this retreat could spell bad news for high flying meme stocks.
According to Carl Capolingua, an analyst at online brokerage ThinkMarkets Australia Ltd:
We may see the price subdued for a long period of time as retail investors get bored waiting and sell out to find something more exciting. The question will be if they can get traction in the Asian markets they’re targeting before the bigger players come in.
Like so many movements impacting global markets, the Reddit army was born in the United States and has since gone worldwide.
What the longer-term implications are for the IOUpay share price remains to be seen.