Table of Contents

Can the ThinkSmart share price continue to rise?

The ThinkSmart share price surged more than 50% in one day this month. Saima Naveed investigates what led to this surge in price.

by | Last updated 27 Nov, 2022 | Technology

buying items online using a credit card

Discover market-beating stock ideas today. Join our Premium investing service to get instant access to analyst opinions, in-depth research, our Moonshot Opportunities, and more. Learn More

The ThinkSmart (LSE:TSL) share price exploded this month, rising more than 60% in a single day. The company was founded in 2007 with the mission to provide intuitive, reliable, and cost-effective business software solutions. That certainly sounds promising to me. But what caused this enormous surge in the stock price? And should I be adding ThinkSmart shares to my portfolio? Let’s take a look.

A little bit of background

Since its IPO in early 2017, ThinkSmart has failed to attract investor interest, most likely due to its declining revenues. In fact, for the majority of its public life, ThinkSmart’s share price has struggled to stay above 10p.

To stay afloat, the management team made the bold decision to sell 90% of its Clearpay subsidiary to the Australian payments giant, AfterPay. Clearpay enables individuals to use a buy-now-pay-later service that has recently started gaining a lot of popularity. This has been the most promising part of the company for many investors. And is one of the main reasons why the ThinkSmart share price started to rise throughout 2020 as the pandemic led to many people adopting this payment solution.

But does this have to do with the stock’s sudden surge?

What made the ThinkSmart share price jump?

The decision to hold onto 10% of Clearpay has proven itself to be a very sensible decision. Because AfterPay and, in turn, Clearpay has just been acquired by another payments giant, Square, for $29bn.

As a result, the Clearpay business has now received access to the entirety of Square’s merchant network. And while ThinkSmart is only going to be getting 10% of the proceeds, that’s still a massive surge in cash flowing into the struggling business. So I’m not surprised to see the ThinkSmart share price explode on the news.

.

Should I buy ThinkSmart shares?

This latest acquisition may have just breathed new life into this business. And now, various analysts have placed share price forecasts of up to 192p over the next twelve months.

After some of my own investigating, I think they may be right. The fate of the company is now largely tied to Square. And with the value of this investment set to increase, ThinkSmart’s share price will undoubtedly follow. 

A £1,000 investment before the announcement was made would now be worth around £1,600 in less than 20 days. I doubt this growth repeat itself in such a short space of time. But over the long term, I believe the ThinkSmart share price can continue to climb higher. Therefore I am considering adding this business to my portfolio today.

Discover market-beating stock ideas today. Join our Premium investing service to get instant access to analyst opinions, in-depth research, our Moonshot Opportunities, and more. Learn More


Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.

Written By

Saima Naveed

Saima spent the early days of her career advancing the finance office of a prominent manufacturing business. After taking a sabbatical, she decided to use her expert knowledge and apply it to the stock market. Now, 10 years later, she manages a substantial portfolio built using detailed and thorough analysis.

Outside The Money Cog, Saima is an avid supporter of empowering women in the workplace. She is currently working very closely with Women of Wonders Pakistan to help other women achieve their career goals.

Current Holdings

PSX: CENERGY, PSX: FFL, PSX: PCAL, PSX: PKGS, PSX: SHEZ, PSX: SIEM

Edited & Fact Checked By
Zaven Boyrazian MSc

Zaven has worked in several industries throughout his career, from aircraft factories to game development studios. He has been actively investing in the stock market for the better part of a decade, managing over $1 million across multiple portfolios.

Specializing in corporate valuation, Zaven employs a modern take on the principles set out by Benjamin Graham to find new opportunities at fair prices.

Home » Articles » Discover UK & US Stocks » Technology » Can the ThinkSmart share price continue to rise?

Get stock ideas in your lunch break

Discover a path to financial freedom today
Learn More