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Added 4 months ago
#Bull Case

Leading and early mover Fintech focused on small business lending where backs have been with drawing. Largre addressable market in Australia with attractive product margins. Tech innovations such as Prospa Pay (similar to AfterPay but for SMEs) likely to drive growth. At $3.60 trading below IPO price where there was signficant scale back.

 

 
Added 4 months ago
#IPO

IPO'd  after a failed/delayed attempt in June 2018

Initial IPO @ $3.64 per share (3.3 times revenue approx) 

In June 2018, Prospa famously delayed their initial public offering (IPO) indefinitely after questions from ASIC about their loan contracts.

Initially a 48 hour delay due to “queries” having been raised by ASIC at the 11th hour.
The extended delay was due to Australian Securities and Investments Commission (ASIC) had questioned its “small business loan terms” given the “industry wide review into financial services small business loan term”. There had been so much noise around the failed IPO that “the momentum had gone a bit” and they announced an indefinite postponement, fearing a stock price slide.
 

After ASIC’s inquiries, Prospa has made a number of changes to their loan contracts, removing several unfair clauses.

Prospa considers that the amendments agreed with ASIC have not had any material impact on the company financially or operationally. In the media release issued by ASIC, ASIC noted that late payment fees are subject to review under the unfair contract term provisions and it “will be undertaking further monitoring of Prospa’s charging of late payment fees to assess whether the manner in which the fees are being charged is unfair in practice”.

Prospa CEO Beau Bertoli is confident about Tuesday’s bell-ringing, but admits postponing the last IPO ‘wasn’t a great idea’

Vickovich, A. (2019). Prospa CEO Beau Bertoli is confident about Tuesday’s bell-ringing, but admits postponing the last IPO ‘wasn’t a great idea’. Business Insider, 10 June [online]. Avaliable at Prospa CEO Beau Bertoli is confident about Tuesday’s bell-ringing

Chau, D. (2018). Prospa: The 'biggest float' of 2018 delayed indefinitely, as regulators investigate fintech loan contracts. Australian Broadcasting Corporation, 8 June 2018 [online]. Available at: Prospa: The 'biggest float' of 2018 delayed indefinitely   

ASIC (2018). 18-262MR Prospa removes unfair loan terms for small business borrowers and guarantors. ASIC, 7 September, 2018 [online]. Available at: Prospa removes unfair loan terms for small business borrowers and guarantors 

Eyers, J. (2018). ASIC warns all fintech business lenders over contracts. Australian Financial Review, 18 September 2018 [online]. Available at: ASIC warns all fintech business lenders over contracts

 
Added 4 months ago
#IPO

IPO: 11 June 2019

  •  29.0 million Shares @ $3.78 per Share (Employees pay $3.40 per Share), raising proceeds of approximately $109.6 million.
  • 132.3 million Shares also be issued to Existing Shareholders
  • Total shares on issue 161.4m