FinTech IPO index rises 1.4% as 2022 winds down
The countdown continues to the end of 2022, something FinTech IPO investors would rather forget.
The earnings season is now almost over, with the exception of a few stragglers. The double-digit percentage swings – up and down – have been a hallmark of recent days, weeks and months. Last week was short, thanks to Thanksgiving. Now back to reality, as they say.
Although the last week saw a slight uptick of 1.5%, with a little less than a month to go, the index is down more than 46%.
If the past is prologue, then we are setting up to see a tough year ahead. Enthusiasm for bringing new companies to market has simply … waned. As reported by Reuters on Wednesday, revenue from public IPOs is down 93% year over year, according to Lynn Martin, president of the New York Stock Exchange.
“There’s a lot of uncertainty and there’s a lot of different forces affecting the markets,” Martin said during an interview with the wire. She stated that companies wishes to list, but waiting for volatility to subside.
The wait can be long, we note.
It may be the case that our group of more than 45 FinTech IPO firms—all but two (Bill.com and 10x Capital) trade as “busted” IPOs—will provide a warning to other firms aiming to go public .
Even heady gains — those where stocks jump 40% or more — haven’t been enough to bring investors back to breakeven. A few pennies here and there on names that trade for $1 or a little more end up with a dramatic (percentage) impact.
The rallies we’ve seen this week come on the heels of a massive rally across markets, as Federal Reserve Chairman Jerome Powell signaled the central bank may moderate rate hikes. The reading is that the toughest period of grappling with rising capital costs, and some of the biggest obstacles to a continued pick-up in consumer spending, may be behind us.
Katapult gained 41% as the company looks to Nancy Walsh coming on board as CFO later this month, having previously served as CFO at LL Flooring Holdings.
Huize was up 9%, and continued to rise through recent weeks, extending a remarkable rally in the wake of nearly month-old earnings reports showing 24% earnings growth.
Nuvei went up 6.2 percent. The company said this week that it has partnered with British airline Virgin Atlantic. The companies said in a release that Virgin Atlantic will gain access to Nuvei’s proprietary modular platform designed to increase acceptance rates and accelerate revenue.
Triterras and Enfusion are losing ground
Among the notable losers, Triterras fell 26%. The company reported its six-month operating results at the end of last month.
The company said that for the first half of fiscal 2023, and according to comments from CEO Srinivas Koneru: “The first half of fiscal 2023 was clearly very challenging for the company. Although global trade flows have stabilized, many of our customers, micro-, SMEs continued to suffer from reduced availability and increased premium rates for trade credit insurance, reduced liquidity and financial difficulties in the trade finance market, reduced trading activity and business suspensions and liquidations. Total transaction volume for the period was $989.6 million compared to $4.0 billion in the same period last fiscal year.
Infusion lost 21.5%. The company said this week that Stephen Dorton has resigned as chief financial officer and reiterated its business outlook from earnings last month. Separately, Deirdre Somers joins the company’s board, with effect from 1 January.
How consumers pay online with stored credentials
Convenience prompts some consumers to store their payment information with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and reveal how merchants can win over holdouts.
