Australian Net IPOs Losing Lustre

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 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

“Did I expect a Not really,” he said, referring to the float
last month of online travel agency
The travel site debuted in May at AUS$1.25, rose to AUS$3.19, but has
fallen back to AUS$1.50.

Another correction is LibertyOne, which has dropped from a high of AUS$5.35
less than a year ago to below AUS$0.90, and has failed to be energised by
last month’s launch of Excite Asia Pacific, of which it owns 50 percent.

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 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

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).

News Around the Web