Australian Net IPOs Losing Lustre
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As the Australian Stock Exchange hosted yet another IPO Monday of an Internet-related business, the gloss on Web stocks is starting to look decidedly less shiny.
A Queensland-based satellite tracking service called GPS Online.com opened at AUS$0.40, peaked at 62 cents and dropped back down to 50 cents at the close -- only a 20 percent premium on an Internet stock when its contemporaries have more than doubled on the day of listing.
Nevertheless, the interest is still there. The 12.5 million shares in the offer were ten times oversubscribed, said Robert Angel, managing director of GPS Online.com.
"Did I expect a travel.com? Not really," he said, referring to the float last month of online travel agency travel.com.au. The travel site debuted in May at AUS$1.25, rose to AUS$3.19, but has fallen back to AUS$1.50.
More established Internet companies, like Sausage Software, have fared better, with Sausage rising from less than AUS$0.10 to hover just under AUS$2.00 following news of new contracts and investors, such as Intel.
Meanwhile, the latest IPO is more of a diversification for an established player. GPS Online.com is a 12-year-old company previously called Hamil Haven. It raised AUS$5 million (US$3.2 million) in the IPO, selling 23.8 percent of the company which is now valued at AUS$26 million (US$16.7 million).
The company sells satellite-based asset tracking services to government, defence and other corporate clients. Existing accounts include a contract for guiding autonavigational minesweeping drones for the Royal Australian Navy and engine performance monitoring for the Australian Army.
Angel said he would have been happy if the stock had closed at 45 or 46 cents, and was "very pleased" at how the float had gone.
"We're not operating on concepts. We are an existing technology provider, but we're only using 'dot com' for the bureau-type monitoring technology," he said.
The float involved a "relatively small acquisition of money," Angel said. The saving grace for the Australian Internet industry may be ecorp, the part owner of the most popular Australian portal, ninemsn, which will sell a 20 percent stake in July for AUS$161 million (US$103 million).