Up for Ransom: iSignthis is a Massive Flop (ASX: ISX)

ASX ISX Share Price - iSignthis is a Massive Flop
Up for Ransom: iSignthis is a Massive Flop (ASX: ISX)

You’re currently being held hostage if you’re invested in iSignthis Ltd [ASX:ISX].

There’s no easy way to put it. It’s called a Suspension from Official Quotation.

I know, it’s hard to stomach…

But what does it even mean? Wceill you get your money back?

Well, today…you’re going to find out.

But first, if you’re swinging by and don’t know about iSignthis, let me give you a brief run-down.

What does iSignthis do?

iSignthis is a dual-listed company in Frankfurt and Australia.

The company provides remote identity verification and a payment authentication service.

The company aims to be a one-stop shop. They want to handle all payment, identity and eMoney needs.

As the media hyped…like PayPal…only smaller.

The paper trail ISX left

Alright, let’s tackle iSignthis.

I wrote to you about the company back on 13 September 2019.

I was concerned for investors who bought into the hype. I’ve done that before, and it didn’t end well.

And that’s why I always try to get an unemotional view of the market.

I’ve found that it helps to see the potential risks other investors may miss.

Anyway, back on 13 September, I told you that investors still wanted to buy in, despite the share price having just plummeted 62%.

It was euphoria. The action in iSignthis this year reminded me of bitcoin in 2017…everyone wanted a piece of it.

That’s what I love about human behaviour. It doesn’t change.

Anyway, that doesn’t help you while your money is stuck in limbo.

So, how did we get here? Well, it’s got to do with Listing Rule 17.3…

As you may know, Listing Rule 17.3 allows the ASX to suspend trading in a security indefinitely.

There are four reasons why the ASX would slap the rule on a company. One of which includes ‘the entity is unable or willing to comply with, or breaks, a listing rule.

So, what caused iSignthis to slip under the listing rule?

Simply put, both the ASX and ASIC are currently investigating iSignthis.

That’s quite ominous.

But those two entities are not the only ones who had their eyes on iSignthis.

Back in September, the company Ownership Matters issued a report highlighting how 336 million shares fell in the hands of iSignthis BVI.

iSignthis BVI is an entity established in the British Virgin Islands.

It also tackled how other entities like Red 5 Solutions — the company’s second largest shareholder and a British Virgin Island company — managed to receive stock.

Seems like we’ve got some transactions happening here, which can certainly raise some eyebrows.

As for ASIC and the ASX, investigations are still ongoing.

The ASX pressed iSignthis for some information on 2 October.

The questions centred around who iSignthis customers were…how many of them were involved in cryptocurrency related activities…plus a review of revenue and where it’s coming from.

I can’t say the questions were overly exciting or even insightful. But the securities exchange must follow protocol.

As for ASIC…

On 8 October, the regulator asked iSignthis for its books.

ASIC is investigating if the company was compliant with its ‘Continuous Disclosure obligations’.

We’re yet to receive an update. I can only assume that they are still fumbling through them.

I’m sure we’ll find out soon enough, though. But with that out of the way…

The cost of doing business

Let’s take a cue from share market knowledge.

I think this will give you more clarity on what to expect over the next few weeks…

In my experience, when a company lifts its suspension the share price tanks.

The reason for that is because investors just want their money back.

They’ll sell at ‘the market’ no matter the price. They just want to move on.

That’s understandable.

Let’s make one thing crystal clear, though. What occurs from here is anyone’s guess.

I’m not overly optimistic on iSignthis given the floating rumours. And for ASIC and the ASX to step in with such force…there must be something we’ve missed on the surface.

When and if the suspension releases, expect to see red in your broker account…

It won’t be easy and there’s no easy way to put this: If you end up making a loss on iSignthis, consider it the cost of your tuition.

This is not a recommendation to buy or sell ISX. It is an update only. I hope you found it useful.

Until next time,

Jonathan Evans Signature

Jonathan Evans,
Analyst, Profit Watch