Why Beforepay Stock Price Crashed On The ASX Today?
Beforepay (ASX: B4P) is a company that provides pay-on-demand services through mobile and web-based applications in Australia. B4P’s applications sync with customers’ bank accounts and enable them access to a portion of their next pay on demand. It also offers automated transaction categorisation, bill prediction, and budgeting tools. The company had its IPO recently.
The Beforepay share price seems to be getting back on the horse after crashing 44% on its float. The pay-on-demand company debuted on the ASX at 11am yesterday after offering its shares for $3.41 under its prospectus.
Unfortunately, after finalising its IPO, its stock tumbled to close yesterday’s session at $1.905.
However, today seems to be a brighter day. At the time of writing, the Beforepay share price is $2.14, 12.34% higher than its previous close.
Let’s look at this ASX newbie’s rollercoaster start to its time on the market.
Beforepay is a financial tech company providing those who use it with advances on their salary.
According to Beforepay chair and former Westpac (ASX: WBC) managing director and CEO, B4P is filling a gap for on-demand access to credit. Hence, the company’s technology provides a suite of budgeting tools that work on smartphones and web apps.
Beforepay became rapidly popular. Thus, between its launch in August 2020 and October 2021, the company had a 25.3% compound monthly growth in “active users”. This allowed the company to advance $170.5 million of pay.
On its debut, Beforepay released an operating update on its December quarter wherein it provided $77 million of pay advances – up 361% on the prior comparable period.
On top of that, its default rates had more than halved, reaching 3% in the quarter.
Why Beforepay share price plummet after its IPO?
As part of its IPO, the company raised $35 million and was left with 46.4 million shares.
That saw it with an expected market capitalisation of $158 million. However, come yesterday’s close, the Beforepay share price saw the company’s valuation of around $88 million.
The offer proceeds will support the company user’s growth strategy, Cash Outs expansion, and products and models refinement. Furthermore, Beforepay considers exploring overseas opportunities.