Loan Shark business will be on its last legs soon.taking...

Loan Shark business will be on its last legs soon.
taking advantage of vulnerable Australians, greedy same day loan sharks.

news and bad news in Beforepay’s maiden interim results as a publicly listed company released late last month.

For optimists, the $11 million half-yearly loss was outshone by the company’s contention it is no longer losing money on each transaction.

Another, ahem, positive for the rolled-in-glitter payday lender is the disclosure that its customers are more addicted to the product than they are to their Gatorade saxophone.

“Our customer base shows continued high levels of loyalty, with 95 per cent of customers who have successfully repaid their first pay advance having taken out a second pay advance,” Beforepay told investors.

Given the company charges a 60 per cent per annum fee to customers it describes as “Aussie battlers” seeking an advance on their pay cheque, it’s probably best for one’s conscience if you don’t think too hard about what it means to have such high rates of recurring transactions.

Nevertheless, what’s, er, good for the goose is good for the gander. Key investors (at least those who haven’t tumbled out amid the stock’s 70 per cent crash since its IPO less than two months ago) are buoyed by all the good news.

This includes Sydney-based fund manager Alium Capital, which became a cornerstone investor in Beforepay’s $10 million pre-IPO capital raising in 2020.

Alium topped up its 6 per cent pre-listing stake to 7.15 per cent right after the ASX bell ringing on January 17 this year. Later that month it bumped up to 8.5 per cent, before jumping to 9.5 per cent in late February. Alium sees itself as a long-term investor, and so godspeed to them.

No one complains when the hamburgers are cheap, and neither did Beforepay chairman Brian Hartzer and directors Daniel Moss and Stefan Urosevic, who each gobbled up more shares following the airing of the results. The trio splurged on scrip in early March at $1.22 a piece. Who could resist when the price was a mere 65 per cent discount to its $3.41 IPO.

The problem is, the stock has fallen roughly 25 per cent since then, hurtling towards not only a new low on Friday of 93c per share, but presumably its inevitable insolvency.

Hartzer spent $48,800 buying Beforepay on the market on March 2, so he’s only suffered a paper loss of roughly $10,000 over the last fortnight. Perhaps he’ll be making the transition from investor to customer any day now.

One would hope other significant shareholders, for their own expediency, are taking the opposite path, such as Rear Window favourite and early Beforepay investor James Spenceley, who appears to have a knack for these sorts of things.

At listing, Spenceley held 1.54 million shares in Beforepay, worth more than $5.2 million.

Given his 3.3 per cent stake is below the substantial holding threshold, it is unclear whether he remains one of Beforepay’s long-term investors, but such a slice of the company would now only be worth $1.4 million, a paper loss of roughly $3.8 million.

We asked where he stood on his holdings, but didn’t hear back.