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Digital payments platform Paysafe Limited (NYSE: PSFE) went public in March through a special purpose vehicle (SPAC). This type of investment vehicle was very popular with investors in 2020 and early 2021, but SPACS appear to have lost its luster lately. Many soaring SPACs have fallen in recent months, including Paysafe. As of this writing, it’s 60% below its all-time high.
In this video from Motley Fool Backstage Pass, recorded on October 5th, Motley Fool contributor Jason Hall admits that many SPACs probably deserve to be downstairs. However, contributor Jose Najarro doesn’t think Paysafe falls into that category. On the contrary, Jose sees Paysafe as a good stock to buy. Here’s why.
Jason Hall: A lot of SPACs have depreciated recently, and let’s face it, there are some pretty trash companies that have gone public through SPAC, but not all. There are some pretty good companies out there, but here’s a list of a few, just a few examples of some that might have started really well and then collapsed from there, and then just a lot more that have generally depreciated in value that year.
What we’re going to do is take a few minutes and talk about a few that we just think might not have played very well. But we think it might be worth investing in. Jose.
José Najarro: Yes jason What I’m going to talk about now is Paysafe. I’m sorry people. Just let me pull this up. I thought I had it open. Paysafe is traded on the New York Stock Exchange as the ticker PSFE. It is currently at $ 7.22. Now let me share my general thoughts and share my screen to show why I am optimistic about this company.
Paysafe is pretty much a payment platform. Two markets that I’m super excited about. First and foremost is the payment platform. The payment platforms are used by a lot of iGamification, casino sports betting companies, and I believe this is still an early market. Here in the United States there are still numerous states that don’t allow sports betting or iGamification, an online casino. I think the market is still pretty strong there. Paysafe also deals with many payment platforms for numerous gambling companies. Well, I know my way around Microsoft, Xbox and some of the other great players.
The other market that I’m very excited about from Paysafe is the eCash solutions. There are numerous countries around the world where the population of people who own a bank or credit card is still very low. eCash Solutions is the ability to use your cash. You go to a store that sells these eCash vouchers, give them cash, and get a receipt. You can now use this receipt for online payment transactions. You don’t need that credit card, you don’t need that debit card. Many of the countries currently growing in this market are in Latin America. also in Europe.
Paysafe has made a number of acquisitions in the past six months. You recently acquired a company called PagoEfectivo that does eCash solutions in Latin America, which is pretty impressive. They also acquired SafetyPay, which also deals with Latin American eCash solutions. You can see they are growing in this market. They also have, I forget the name, they recently acquired another one in Europe that focuses on eCash solutions in Europe.
And as I said, for me eCash solutions are the ability or growth of iGamification. I think here in North America they have increased iGamification sales by about 60 percent and are with big players Draft kings. You keep winning new titles. We see growth investments in North America, iGamification and eCash solutions, e-commerce, field service and the information sector.
This is the stock I’m looking at right now. As I mentioned earlier, Paysafe is currently trading at $ 7.22. We can see from the 52-week closing price that the stock is down about 57%, so it’s definitely seeing better days. One that I currently have in my portfolio and I add from time to time just because of the excitement for its growth.
Room: It’s interesting, I think you’ve said many times on one of these examples that we focus on investing in our winners, usually stocks that have gone up because that’s a signal that is why the stock has gone up. Jose, this is interesting. The business appears to be well run, only investor conviction seems to have waned and the share price has fallen.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.