The deal values the company at $3.26 billion, and $463 million will be added to the cash reserves as part of the deal. Payoneer is valued at 7.6 x 2021E revenue of $432mm. Through SPACs, various types of players enter the market, some of whom promise investors the moon. The previous SPAC deal I brought up here on the forum as a separate thread was the BFT/Paysafe IPO, which is why I became particularly interested in Payoneer.
Compared to other players in the industry, the valuation is, in my opinion, very reasonable. Considering Payoneer’s growth rate of 25% in 2022 vs. 7% for global payments processors peers, why wouldn’t it be allowed at least the average multiples of this group in the IPO? Even allowing for 15x (note! the group average is 25x) would mean a share price of ~$20, which is an upside of about +50% from the current $13 level.
The valuation is currently at the level of somewhat stagnant companies that only offer payment intermediation. Payoneer’s overall offering is much more than that. With Payoneer, companies can send and receive money. Payoneer acts as a bridge between banks and businesses and benefits from both sides. Payoneer grows as its customers grow.
All images are taken from the investor presentation found at the beginning of the post. What kind of thoughts does this raise on the forum? Is this a gem left behind in the rush of hundreds of SPACs to the market, based on valuation and growth, or should it trade at EV/S <10 in the current market?
I’ve been wondering the same thing, I’m also involved in BFT. Technically, the price has stayed above the daily MA20 the whole time and is now close to it, which is a good buy signal for me, historically speaking. From a fundamental perspective, I don’t see why this wouldn’t rise to the level of others in terms of multiples. PayPal and SQ got a big boost by accepting cryptocurrencies (mainly BTC) - I’ve been waiting to see if the same thing would happen here. - edit: I also own PayPal
I took a quick look, but Paxful seemed to be mainly a Bitcoin brokerage service where users can trade it among themselves. PayPal aims for Bitcoin to be used to buy or sell services, meaning they’ll do the conversions to fiat if needed.
Oh yeah, that was mentioned too. It’ll probably create a pretty nice amount of extra volume through that. I couldn’t find news about it on Payoneer’s own website. Was it only published in China?
Mm. because of this eBay-Asia pattern, I’m quite bullish on this. It’s strange, though, that there’s nothing about this on Payoneer’s own website. Here’s a direct link to the story in English:
Yeah, the information about that cooperation is linked there and can be found on the site, but it doesn’t mention that it completely replaces PayPal there and works as the sole payment method.
Today, we bounced off the daily MA20; a good sign that it still provides support, especially when the decline has looked so disheartening to my bullish scenarios
Can the forum help me find the most up-to-date information on institutional holdings? If I’m interpreting these notifications correctly, these alone represent a 25% ownership stake from just the last week? I’m interested in, for example, how much of this is free float.
Different information in both and these latest flaggings are not visible? I’d even be happy to pay for a service that would provide a relatively real-time situation. If it’s true, it’s a good sign:
Institutional purchases made by the end of the year; SEC dates tell us better when something was bought or sold. I’ve received an annoying amount of 13F filings in my email within a week.
Reporting for these has longer delays than what we are used to.
I’m not good with numbers, but don’t the annual expenses grow with the revenue in such a way that the amount of loss will increase in the coming years? Enlighten me, wiser ones.
I’m not particularly worried if losses are projected to be -18m in 2020, -50m in 2021, and -45m in 2022, given that the company currently has little debt and, after the merger, will have a debt-free ~500m in cash. Growth and market acquisition come at a cost. The calculation also doesn’t account for potential acquisitions, which can be made with a large cash reserve.
Considering the growth rate and market size, now is not the time to rest on our laurels. In this business, you need to grow and scale.
Now, from a technical perspective, I think we’re in a pretty interesting place. @DayTraderXL, do you have time to take a look and tell me what you see?
I have a small amount of this in my portfolio, but I’m a bit puzzled as to why it can’t be turned profitable even in the coming years. I would understand if it were an early-stage startup, but it’s already handling 44 billion in volume annually, and that sum is only growing in the coming years. The product is clearly mature, as it can be sold to major players in the industry and is already in use on a large scale. How big does the scale need to grow for this to become profitable, that’s what worries me a bit…
