WEST PALM BEACH, Fla. - PSQ Holdings, Inc. (NYSE: PSQH), also known as PublicSquare, announced today that it has secured a $10 million investment through a convertible note private placement with a board member and his affiliates. The note, with terms similar to those offered in March 2024, is part of the company's strategy to expand its payments business and support its Marketplace and Financial Technology merchants.
Michael Seifert, Chairman and CEO of PublicSquare, stated that the company is gearing up for growth, with over $200M in annualized GMV already under contract for its payment processing services and sights set on reaching $1.0 billion by the 2024 Christmas season. The new capital is expected to drive further innovation and scale the company's payments platform, which is designed to be resistant to cancel culture.
The convertible notes are set to mature in 2034, with an interest rate of 9.75% per annum. They can be converted into Class A common stock for $4.63641 per share at the discretion of the noteholders or, under certain circumstances, the company. PublicSquare also retains the right to call the notes in cash and can require conversion if the trading price of its Class A shares exceeds certain thresholds post-closing.
Additionally, the noteholders have agreed to lock-up terms, trading and hedging restrictions, and have been granted registration rights for the Class A shares upon conversion of the notes.
PublicSquare operates in three segments: Marketplace, Financial Technology, and Brands. Its Marketplace aims to align consumer shopping with their values, while leveraging data to offer financial products and brands. Its Financial Technology segment includes Credova, a consumer finance company, and PublicSquare Payments, a payment processing company. The Brands segment features EveryLife, a baby products company, and PSQLink, a digital marketing and CRM platform.
This news is based on a press release statement.
In other recent news, PSQ Holdings has announced significant developments in its financial and operational strategies. The company has extended its $10 million credit facility to 2025, a strategic move aimed at enhancing financial flexibility. This amendment also includes key changes such as an increase in the advance rate on certain eligible receivables and standardization of Delinquency Ratios and Liquidated Receivables Percentages.
Further, PSQ Holdings has revealed plans to migrate its Marketplace segment to the Rumble Cloud platform, a strategic step expected to bolster the resilience of its commerce and payments operations. The move has been endorsed by both PSQ Holdings' CEO, Michael Seifert, and Rumble's CEO, Chris Pavlovski, who view it as a significant step towards expanding PublicSquare's Marketplace.
Despite encountering challenges, PSQ Holdings has reported a 39% quarter-over-quarter increase in the firm's brands business, following the recent acquisition of Credova, a consumer financing and payments company. This growth has contributed to both revenue and profitability. In response to these developments, Roth/MKM has adjusted the price target for PSQ Holdings from $8.50 to $7.50, while maintaining a Buy rating.
Looking ahead, PSQ Holdings plans to implement platform changes in the second quarter, with expectations of stimulating further quarter-over-quarter growth. Moreover, the upcoming launch of PSQ Payments is projected to serve as an additional catalyst for profitable growth towards the end of 2024, as noted by Roth/MKM.
These are just a few of the recent developments for PSQ Holdings.
InvestingPro Insights
As PublicSquare (NYSE: PSQH) navigates its growth trajectory, current market metrics and analyst insights provide a clearer picture of its financial landscape. According to InvestingPro data, PSQH has a market capitalization of $84.44 million, underscoring its position in the market. Despite its ambitious growth plans, the company's P/E ratio stands at -1.12, and the adjusted P/E ratio for the last twelve months as of Q1 2024 is at -1.95, indicating that investors are currently valuing the company's earnings at negative levels, which can often be seen in companies investing heavily in growth or struggling with profitability.
One of the most striking figures is the company's revenue growth, which has surged by 928.33% over the last twelve months as of Q1 2024. This explosive growth rate is a testament to PublicSquare's expanding operations and could be a significant factor for investors considering the company's potential. However, an InvestingPro Tip points out that analysts do not anticipate the company will be profitable this year, which may temper expectations despite the impressive revenue increase.
Another InvestingPro Tip suggests that PublicSquare is quickly burning through cash, a crucial factor for investors to consider given the company's recent $10 million investment through a convertible note. The ability to manage cash flow is essential for sustaining operations and pursuing further expansion, especially in the competitive payments and financial technology sectors.
For readers interested in a deeper dive into PublicSquare's financial health and future prospects, InvestingPro offers additional tips on their platform, providing a comprehensive analysis that can guide investment decisions.
InvestingPro also provides a fair value estimate of $3.12 for PSQH, which, combined with the analyst target of $7.5, may indicate room for potential growth or a reassessment of the company's valuation. As PublicSquare continues to push towards its ambitious $1.0 billion GMV target, these financial insights will be critical for investors tracking the company's progress.
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