Is this the right time to exit from Beforepay Group Limited?

Company Overview

Beforepay Group Limited was founded in 2019. The company operates in the Pay on Demand industry, a relatively new concept that appears attractive to potential customers. This business model is witnessing significant growth as customers look for a more flexible and transparent approach to managing their finances.

Initial Public Offering

The company had launched its IPO on the Australian Securities Exchange under the ticker B4P and had sold approximately 10.3 million shares at AU$ 3.41/share. We had covered this IPO in our ‘Kalkine IPO Report’ on December 03, 2021 and had concluded that this IPO was only “Attractive for High-Risk appetite investor” given its relatively new business, scalable business model, and solid growth reported in number of cash outs.

Daily Price Chart (as on February 15, 2022). Source: REFINITIV, Analysis by Kalkine Group

Conclusion

Investors who have invested into this IPO can consider ‘Exiting’ from their position at the closing price of AU$ 1.385 as on February 15, 2022, given:

• Growth-stage Company: Beforepay is a growth- stage company with a history of losses. We expect the company to incur significant expenses and continuous losses for the foreseeable future.
• Unable to Access Funding: The company is exposed to funding risk as a fast-growing business. As a result, it is likely to require additional debt and equity capital in the future for its growth and to respond to business opportunities, challenges, or unforeseen events.
• Default Risk: The company is also significantly exposed to credit default risk by the customers, which could substantially weigh on the group’s overall performance.

*The reference data in this report has been partly sourced from Refinitiv.

Disclaimer

Kalkine New Zealand Limited is authorised to provide general advice only. The information on this website does not take into account any of your investment objectives, financial situation or needs. Before you make a decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement from the product issuer. You should consider the appropriateness of advice taking into account your own objectives, financial situation and needs and seek independent financial advice before making any financial decisions.