Beforepay (ASX:B4P) share price crashes 44% after IPO

Beforepay is making a case for the worst IPO of 2022 in January…

| More on:

Image source: Getty Images

Key points

  • Beforepay completed its IPO raising $35 million at $3.41 per new share
  • Investors have sold down the personal lender’s shares to a lowly $1.91
  • This was despite the company revealing strong growth during the December quarter

The Beforepay Group Limited (ASX: B4P) share price has hit the ASX boards today and crashed lower following the completion of its initial public offering (IPO).

In afternoon trade, the personal lender’s shares are down 44% from their listing price to $1.91.

The Beforepay IPO

Beforepay’s shares landed on the ASX today after raising $35 million at $3.41 per new share. This gave the company a market capitalisation of $158.4 million at listing. However, with its shares crashing today, its market capitalisation has now dwindled to approximately $90 million.

The proceeds from the IPO are to be used to allow Beforepay to invest in additional customer acquisition, support growth in cash outs, invest in product and credit model refinements, explore the viability of overseas opportunities, and pay costs associated with the offering.

What is Beforepay?

According to its prospectus, Beforepay was founded in 2019 to offer consumers a better way to manage their personal finances. This is by providing the flexibility to access their pay earlier, without having to rely on credit cards or other forms of revolving debt.

In doing so, Beforepay believes that it meets the demand of consumers who have been increasingly rejecting these forms of credit, while filling a gap in the market for flexible, transparent and on-demand access to credit.

Beforepay’s Chair, former Westpac Banking Corp (ASX: WBC) CEO Brian Hartzer, commented: “I’m delighted to see Beforepay list on the ASX today. The strong support we’ve received from investors is testament to the growth Beforepay has delivered as a startup and the opportunity ahead of us as a public company.”

“On behalf of the Board I’d like [to] thank our existing shareholders for their support during the early stages of our business and welcome the many new shareholders, whose investment in Beforepay is a vote of confidence in both the Pay on Demand industry and Beforepay’s future growth,” he added.

That confidence vote hasn’t lasted long unfortunately. This is despite Beforepay revealing further strong growth during the December quarter. This morning it revealed pay advances up 361% to $77 million and active users up 199% to 139,100.

Should you invest $1,000 in Beforepay right now?

Before you consider Beforepay, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Beforepay wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on IPOs

a man sits on a rocket propelled office chair and flies high above a city

Aurora Energy Metals share price rockets 35% on ASX debut

This lithium and uranium explorer debuted the ASX in style.

Read more »

Man in business suit above the clouds plummeting downwards back first

Chrysos Corporation share price plummets 40% on ASX debut

The ASX newbie offers a fresh way to analyse gold assays.

Read more »

Graphic showing a tablet with an IPO rocket going up with a stock market chart representing the upcoming IPO of ASX uranium and lithium share Aurora Energy Metals

New ASX uranium share to hit boards next month and investors are already pouncing

Introducing ASX uranium and lithium miner Aurora Energy Metals...

Read more »

A miner in a hardhat makes a sale on his tablet in the field.

This lithium miner is set to list on the ASX next month following its IPO, and counts a Tesla supplier among its key investors

We could be in for a new ASX debutant...

Read more »

A team celebrates a win in the office.

Newest battery minerals share booms 80% on ASX debut

Early investors in this ASX battery-focused company, rejoice!

Read more »

Energy Shares

This ASX energy share just hit the boards at double its IPO price

The ASX has a new energy stock and it's already proving a hit.

Read more »

Rocket takes off from the hand of a businessman.

Killi Resources (ASX:KLI) share price kills it on first day of trade, up 160%

Killi Resources shares soared 160% today. Have shareholders hit gold?

Read more »

A woman holds a glowing, sparking, technological representation of a planet in her hand.
Ask a Fund Manager

Expert reveals one IPO he’s absolutely pumped about. When will it hit the ASX?

Ask A Fund Manager: SG Hiscock's Rory Hunter tells why he's looking forward to one possible listing coming up later…

Read more »