You might have noticed the Cirralto Ltd (ASX: CRO) share price didn't budge today, and that's because the payments provider requested a trading halt.
So, what is the trading halt for? For a change, it's not about an ASX price query.
More money, please
Cirralto requested the trading halt in relation to a proposed capital raising. This comes after the last few days of mind-blowing trading volume.
As reported yesterday, Tuesday and Wednesday's trading volume was 352.5 million shares and 283.4 million shares respectively. For comparison, last Thursday and Friday only experienced 13.7 million and 17.5 million shares of volume.
It would be no surprise that the company would seek to take advantage of the elevated Cirralto share price interest. However, this capital raise comes less than 3 months after the company's last capital raise.
As we noted on Tuesday, Cirralto's low cash flows from operating activities require it to rely on other forms of financing. In November last year, this took the form of a $2.8 million placement.
As reported in the company's latest quarterly, Cirralto had a $1.029 million net outflow, excluding the capital raise.
Riding the buy now, pay later wave
Over this week, many small-cap shares have experienced monstrous price rises. Speculation over the buy now, pay later (BNPL) sector continues to rage, as the instalment payment system thrives globally.
Recent beneficiaries have included the following:
- IOUpay Ltd(ASX: IOU) – a recent BNPL entrant to Malaysia, up 257% in the last month.
- Fatfish Group Ltd (ASX: FFG) – a tech investment firm that holds a stake in a recent Singaporean-based BNPL entrant, up 326% in the last month.
- Zip Co Ltd (ASX: Z1P) – Afterpay competitor with global operations, up 104% in the last month.
Cirralto is playing catch-up, with its share price rising 60% in the last month.
When will the Cirralto share price trade?
Cirralto stipulates shares be halted in the trading halt request until either Monday 22 February or once the announcement is released to the market – whichever comes first.
For the time being, shareholders will have to sit tight for the capital raise details.
