I was surprised when following the ASX listing the share price plummeted far below the price of the share issue at A$2.20 preceeding the issue. Any dilution factor would not have resulted in such a drop in valuation/share. There were a few days of negativity to tech stocks following the Trump election but that now seems to have passed.
I am further bemused with the latest drop in price following the release of the interim results. Yes, the loss has increased but the spectacular growth in revenue along with the cash in hand following the issue should not give cause for alarm. If the company can produce this growth prior to the issue, then why should we doubt its forecasts for the next period? To be cash flow positive within 12 months is something to look forward to.
Apart from its growth in a niche market, I see this stock as a potential buyout target for one of the really big USA mobile/online payment companies, especially if they can extend into the general charities arena and start picking up some of the corporate market. The company has chosen to create a secondary listing on the ASX in the first instance after considering a US listing but eschewed that for the present.
And yes, I did buy in with the recent savage drop. It is still well below the pre-ASX listing price even with continuing increases in revenue growth and so I will tag it as a buy.
PPH Price at posting:
$1.70 Sentiment: Buy Disclosure: Held
