Saturday, June 25, 2022

Payment Data Systems, Inc. (NASDAQ:PYDS) Breaks Higher Out of Base

Payment Data Systems, Inc. (NASDAQ:PYDS) shares rocketed higher this week, blasting off out of the stock’s long-standing sideways trading range to gain as much as 70% in just about two trading sessions. The action appears to be tied to PYDS’s press release announcing the pending closing of the Singular Payments, LLC acquisition. According to the release, all parties have reached final terms and closing is scheduled to occur on September 1, 2017.
“We are happy this important transaction has reached the point of closing. This strategic acquisition adds deep payments industry expertise and leadership, while offering expanded distribution capabilities and a nice portfolio of credit card processing customers to Payment Data,” stated Louis Hoch, President and CEO of Payment Data Systems.
Payment Data Systems, Inc. (NASDAQ:PYDS) frames itself as a company that, together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States.
PYDS offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH processing services include Represented Check, a consumer non-sufficient funds check that is represented for payment electronically rather than through the paper check collection system; and Accounts Receivable Check Conversion, a consumer paper check payment, which is converted into an e-check.
PYDS also offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a Website or retail services accessed through a physical terminal. In addition, it provides a proprietary Web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards.
Further, PYDS creates, manages, and processes prepaid card programs for corporate clients to issue prepaid cards to their customer base or employees; and issues general purpose reloadable cards to consumers as an alternative to a traditional bank account. Additionally, it operates billx.com, a consumer Website that allows consumers to process online payments to pay other individual; and provides prepaid cards to consumers for use in as a tool to stay on budget, manage allowances, and share money with family and friends.
PYDS markets and sells its products and services directly, as well as through non-exclusive resellers. Payment Data Systems, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.
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As noted above, we saw shares of PYDS go nuts this week as the company announced the closing of its Singular Payments, LLC acquisition. The market clearly views this deal as especially important to the company’s future success.
Hoch continued adding, “We believe this key acquisition will quickly accelerate the growth potential of our company while broadening our revenue streams. We intend to leverage the proven sales channel and technology platform that Vaden and his team have built to better position Payment Data for the future. We are thrilled to have the Singular Payments team join the PDS family. Our belief is that this acquisition is in alignment with our growth initiatives and strategy, and should provide enhanced value to our shareholders.”
Vaden Landers, CEO of Singular Payments, said, “Our goal has always been to deliver a simplified, revolutionary, and value-centric payment solution to the merchant community. I, along with my entire team, am excited to be joining the Payment Data organization. The combined company will leverage our collective leadership talent, technology, relationships, and market upside to scale quickly and focus on creating value for our trusted partners, the clients with whom we do business, and for our shareholders.   We have had a number of significant wins recently on the integrated side of our business, and look forward to the impact each will have once fully migrated into the Payment Data environment.”
Currently trading at a market capitalization of $27.83M, PYDS has a significant war chest ($18.2M) of cash on the books, which must be weighed relative to virtually no total current liabilities. PYDS is pulling in trailing 12-month revenues of $11.3M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -11.8%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $PYDS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: We hold no position in $PYDS, either long or short, and we have not been compensated for this article.

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