Frenzy for Freelancer stock
Outsourcing website Freelancer.com has again shone a light on local technology stocks, with the company doubling in value on its stock market debut.
At midday, shares in the online job-market outfit started trading at $2.50 each - five times the price of 50¢ each they were sold to investors.
In the initial frenzy Freelancer.com peaked at $2.60 giving the company a market capitalisation of $1.1 billion.
However, they ended the day at $1.60 putting the site's value at $697.6 million.
Freelancer.com is a website that allows people to post a job and get freelancers from around the world to bid on it.
The company owns 40 similar sites around the world, including Freelancer.co.uk in Britain.
Its entry on the ASX comes amid a boom in technology stocks in the US and Australia, with foreign exchange trading site OzForex listing locally and Twitter listing on the New York Stock Exchange earlier this month.
Part of the frenzy was a result of Freelancer being tightly held with just 6.9 per cent of its shares sold on the ASX. Its chief executive and founder Matt Barrie retains the lion's share of the company's stock, holding a 46 per cent stake in the company.
The present valuation puts Mr Barrie's paper wealth at $320 million. Mr Barrie described the stock market debut as a "land grab".
He said the company's immediate focus would be to build up its management team.
"It is all about execution and growth," he said.
Seek co-founder and chief executive Andrew Bassat is among a suite of high-profile investors to throw their weight behind the IPO. Mr Bassat said the company was well-positioned to grow its share of the online outsourcing market.
"The market Freelancer operates in is potentially very large and there is plenty of blue sky if the company can continue to execute well," Mr Bassat told BusinessDay.
Freelancer.com is expected to deliver a post-tax profit of $471,000 for the previous financial year. This is down from $728,000 in 2012.
Technology lawyer and investor Nick Abrahams said the number of US companies and investors coming to Australia had jumped in the past six to eight months.
He said companies were now being valued more closely to their US counterparts.
"There's a bit of a revaluation of Australian technology companies to get them closer to US company valuations," he said.
"We're definitely seeing US companies and investors coming to Australia."
He said the latest activity in the tech sector follows the launch of group buying websites such as Groupon, which had fallen in popularity in recent times due to saturation in the market.
While he said the success of Freelancer could also be threatened by a crowding in the outsourcing market, he said the Freelancer's business model had "longevity".
"The business is likely to be more sustainable than group buying sites," Mr Abrahams said.
Freelancer's debut is the 33rd company listing on the ASX this year. It comes amid a flood of listings to hit the market as investors flock to the stock exchange amid record gains in equities.
Frequently Asked Questions about this Article…
Freelancer.com is an outsourcing website that allows individuals to post jobs and receive bids from freelancers worldwide. It's a platform that connects job posters with freelancers who can complete the tasks.
Freelancer.com's stock value surged due to a high demand for its shares, which were tightly held with only 6.9% sold on the ASX. This limited availability, combined with interest in technology stocks, contributed to the initial frenzy.
On its first day of trading, Freelancer.com shares started at $2.50, peaked at $2.60, and ended the day at $1.60, giving the company a market capitalization of $697.6 million.
Freelancer.com's listing on the ASX is significant as it highlights the growing interest in technology stocks in Australia, mirroring trends in the US. It also marks the company's entry into the public market amid a boom in tech stock listings.
Notable investors in Freelancer.com include Andrew Bassat, co-founder and CEO of Seek, who believes the company is well-positioned to grow its share in the online outsourcing market.
Freelancer.com faces challenges such as potential market saturation and competition in the outsourcing sector. However, its business model is considered to have longevity and sustainability compared to other models like group buying sites.
Following its stock market debut, Freelancer.com plans to focus on building up its management team and executing growth strategies to expand its market presence.
Freelancer.com's valuation reached over $1 billion at its peak, despite the company barely turning a profit. It reported a post-tax profit of $471,000 for the previous financial year, down from $728,000 in 2012.
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