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iSignthis share price: where next following surprise ASX suspension?

Following a year of strong share price gains, we examine what caused the recent suspension of iSignthis shares from official quotation.

iSignthis share suspension in focus Source: Bloomberg

iSignthis (ASX: ISX), the high-flying payments darling was suspended from official quotation Wednesday and is currently in the process of responding to dual queries from the ASX and ASIC.

In response to this, the company’s CEO, John Karanatzis, noted that iSignthis:

'Welcomes any opportunity to address regulator queries, which are a normal part of operating in regulated markets and industries, and is fully co-operating with regulators'

Speaking to the company’s strong commitment to compliance, Mr Karanatzis further noted that in the 'last year the company has faced multiple audits without any material concerns arising.'

What triggered these ASX and ASIC queries?

iSignthis (ASX: ISX), has been one of the best performing stocks on the ASX this year, rising a staggering 613% since January. With this meteoric rise however, has come elevated levels of scrutiny from regulators, the media and armchair investors.

Overall, recent share price volatility looks to be the primary factor behind the ASX’s move to suspend iSignthis from official quotation.

On this front, the ASX noted early Wednesday that:

‘It is appropriate to suspend trading in the shares of iSignthis Ltd ('ISX') with immediate effect under Listing Rule 17.3, pending the outcome of enquiries to be made by ASIC and ASX into a number of issues concerning ISX.’

Indeed, big share price swings off the back of even bigger announcements have become the norm for the high-flying iSignthis in recent times.

A play by play of this volatility

The headlines of the company’s announcements and the corresponding share price run ups speak for themselves.

On 9/9/2019 for example, iSighthis released the following update to the market, noting that ‘Annualised GPTV Exceeds A$1.1bn in August 2019.’

As we previously reported, iSighthis shares initially skyrocketed on this news, soaring 14% in a single trading session.

Yet the company would see its stock decline soon after this (which itself would cause the ASX to raise a separate price query), as the market worried over concerns raised by an Ownership Matters Report. Around this time, iSignthis described this report as ‘unsubstantiated’ and other media coverage concerning share disputes by the AFR as misleading.

This negativity built up quickly and ultimately caused ISX shares to fall below the A$1 mark.

Yet this bearishness was quickly forgotten by the 1/10/2019, when iSighthis released the following update to market, noting that ‘Annualised Paydentity GPTV Exceeds A$1.9bn in Sept 2019.’

iSignthis rose close to 20% off this latest release – to A$1.07 per share – before the ASX suspension was issued.

Where next for the iSignthis share price?

No clear date has been given for when iSignthis shares may be lifted from their suspension; however, the company has noted that it will keep shareholders updated as soon as is practical.

No one can anyone really say what kind of reaction will be received from shareholders when the ISX shares are released from the ASX suspension.

Until then, the company’s stock will remain at the quoted price of A$1.07 per share – some ways off its heady A$1.765 peak.

According to the AFR, Patersons Securities currently has a price target of A$2.07 on iSignthis (ASX: ISX), which on this last-quoted price would equate to upside potential of more than 90%.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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