The iSignthis Ltd (ASX: ISX) share price was trading 27% lower today, perhaps as a result of more fallout from the Ownership Matters report.

About iSignthis Ltd

iSignthis is listed on the ASX and Frankfurt Stock Exchange. It provides remote identity verification and payment authentication combined with e-money, transactional banking, IBAN issue and payment processing capability. Its products and businesses are iSignthis Paydentity, ISXPay, UAB Baltic Banking Service and Probanx Information Systems. 

What’s Happened?

There has been no material news released from iSignthis today, however, it would appear the company’s ongoing battle with critics is weighing on the share price yet again.

The matters raised by outside firms such as Ownership Matters, and disclosed in part by iSignthis to the ASX earlier this week, seem to relate to issues of corporate governance.

For example, critics have said certain performance targets for key personnel were set at $5 million in revenue during a six-month period, and that target was exceeded by just $1,347.

iSignthis challenged this by saying, “even if interest and government grants were excluded from the audited revenue figure, only Milestone C [the six-month revenue target] would have been achieved by a margin of $1,347. Milestone A would have been achieved by a margin of $2,501,347 and Milestone B would have been achieved by a margin of $1,251,347.”

Other concerns raised include “opaque” ownership structures by directors of iSignthis and “limited disclosure” about revenue increases. iSignthis says it has written to Ownership Matters seeking clarification.

Buy, Hold or Sell?

I cannot tell you for certain what’s happened, why and when regarding the matters above, so I’ll just stick to what I know about investing more generally.

From where I sit, shares of iSignthis appear to be extremely expensive. As I wrote last week, at one stage the company had less than $10 million in reported half-year revenue and yet the combined total worth of all shares in the company was over $1.5 billion. That just didn’t add up.

And even at today’s seemingly discounted share prices, I’m still not a buyer of iSignthis shares, if only for valuation reasons.


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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

Disclosure: At the time of publishing, Owen does not have a financial interest in any of the companies mentioned.