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Mastercard Partnership Is the Icing on the Cake for Exela Technologies

It’s bizarre and senseless, the way Wall Street is treating Texas-headquartered Exela Technologies (NASDAQ:XELA). Judging by the price action of XELA stock, you’d think that the company is failing miserably.

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In actuality, the complete opposite is true. In 2022, Exela is a leader in business process automation with more than 4,000 customers throughout 50 countries.

Besides, fiscal 2021 was a standout year for Exela. That year, the company raised $407 million in gross equity and reduced its total long-term debt by $454 million.

Nevertheless, Exela gets little respect from the investing community. Could there be a tech-market opportunity of a lifetime here?

A Closer Look at XELA Stock

This isn’t to say that Exela has always been out of favor. Impressively, XELA stock jumped from $1.40 to $3.20 in January of 2021, and then to $4.61 in March of that year.

That price move may have been attributable to a Reddit-fueled short squeeze. After all, social-media traders pumped up a number of low-priced stocks in early 2021.

During that time, it might have been unimaginable that XELA stock would fall below $1 by the end of the year. Yet, that’s exactly what happened.

Fast-forward to early February of 2022, and the Exela share price is roughly 80 cents. Getting back above $1 will be crucial for psychological reasons, and also because the Nasdaq exchange has been known to sometimes de-list stocks that trade below $1 for a long time.

Building Digital Roads

While Exela has a number of business process automation software products/services, one of them truly stands out as a potential game changer.

It’s known as Exchange for Bills and Payments, or simply as XBP. Exela’s credo for XBP is, “Building Digital Roads to Repair Broken Processes.”

The broken processes involve digital payments, particularly in the area of billing. Unfortunately, the digitized billing process is sometimes unfriendly, inefficient and not entirely secure.

Exela seeks to solve these issues with XBP. This can be described as a secure messaging service which enables billers, consumers and businesses to communicate and transact easily.

With XBP’s user-friendly app, billers can select the amount and due date, and specify the products and services to be billed. Also, the billers and payers can discuss payment timing, products/services, bill details and more through the platform.

And of course, the payers can remit their payments through XBP, and they can specify the amount, method and timing of the payments.

Mastering the European Market

The benefits of using XBP could include lower billing and payment costs, along with an easier dialogue between the billers and the payers, when needed.

In time, businesses and customers around the world might discover the benefits and applications of using XBP.

And actually, this is already happening in 2022 as Exela is working with a payments-market giant to promote XBP abroad.

In particular, Exela is expanding the company’s existing relationship with Mastercard (NYSE:MA) in the EMEA (Europe, Middle East and Africa) region to support the automation of “giro” payments and processing in Norway, using the XBP platform.

“Giro” payments are basically just direct bank-to-bank transfers. With the assistance of XBP – along with new technology solutions for “optical/intelligent character reading” and “automated signature verification of payment transactions” – Exela and Mastercard intend to help process over 11 million giro payments in Norway.

The Bottom Line

All in all, XELA stock ought to be above $1 and probably deserves to be much higher than that.

The expanded partnership with Mastercard could be the catalyst that gets investors excited about Exela again.

There’s no need to pray for another Reddit short squeeze. Exela is on the cutting edge of business process automation solutions, and deserves a re-rating on Wall Street.

That re-rating could happen in 2022. Therefore, you might want to take a position in XELA stock before it makes a swift, substantial move.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/02/mastercard-partnership-is-the-icing-on-the-cake-for-xela-stock-holders/.

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