There’s a growing number of tech stocks on the ASX and numbers were boosted this week with the listing of 3P Learning. The educational software provider was the biggest Australian tech IPO of the year with hopes pegged on the growth of the company’s key products: Mathletics and Reading Eggs.
In a surprise move, online travel booking company Wotif.com has scored a $703 million takeover offer from US online travel giant Expedia Inc. While online car buying website Carsales.com Limited will spend $60.1 million to acquire a controlling stake in Australia’s largest car finance broker Stratton Finance.
There’s also growth aspirations from satellite communications company NewSat Limited which has secured an $US11.7 million Jabiru-2 capacity contract with a global satellite systems integrator. Also, MOKO Social Media Limited will list on the US NASDAQ stock market in an effort to raise US$8.25 million.
The NASDAQ, the tech heavy Wall Street index, ended a run of gains this week as it tumbled the most in two months on Tuesday, losing 1.4 per cent. Echoes were felt in Australia where a similar run of positive results came to a halt.
US internet and bio-tech stocks fell sharply on Tuesday, compounding the pain from Monday. Netflix Inc, Amazon.com Inc, TripAdvisor Inc and The Priceline Group all took significant hits to their share prices.
3P Learning (ASX:TPN)
listed on the ASX this week. The education software provider had an issue price of $2.50, but by close on Wednesday the price was down to $2.15. The float raised $282.7 million which represented a float of around 80 per cent of the company.
Finance News Network spoke to the CEO of 3P Learning, Tim Power, to find out about the decision to list on the ASX and the challenges facing emerging tech companies.
What’s the business model you’ve found to be most effective?
“When we sell our applications to schools it’s on a per student basis, and it’s on an annualised basis. It has a recurring revenue style feel.”
Why did you choose to list on the ASX?
“We wanted to continue building out our mission. We think education is a shield for resilience through life. We thought a listing would give us the impetus to keep going.”
How do you defend against piracy?
“We encrypt and protect the backend code, but really, the only protection is to move fast, to adapt, evolve and keep improving the resources, that’s the only true protection.”
Mergers and Acquisitions
Online travel booking company Wotif.com Holdings Limited (ASX:WTF)
has scored a $703 million takeover offer from US online travel giant Expedia Inc (NASDAQ:EXPE). Expedia has offered Wotif $3.06 cash per share and a special dividend of 24 cents, representing a 31 per cent premium to the company’s trading price over last week.
Online car buying website Carsales.com Limited (ASX:CRZ)
will spend $60.1 million to acquire a controlling stake in Australia’s largest car finance broker Stratton Finance. Carsales.com will take a 50.1 per cent stake in Stratton Finance and fund the purchase with existing cash reserves and debt. Stratton Finance was established in 1998 and offers a range of finance and insurance solutions for cars, boats, commercial vehicles, business equipment and property.
Satellite communications company NewSat Limited (ASX:NWT)
has secured an $US11.7 million Jabiru-2 capacity contract with a global satellite systems integrator. The deal is for the supply of Jabiru-2 satellite transmission capacity over Australia, Papua New Guinea, Timor Leste and the Solomon Islands. The three year contract has an option for an extra two years and will start once Jabiru-2 enters commercial service following launch in September.
M2 Group Limited (ASX:MTU)
has reported net organic growth of 71,000 post paid services in the second half and affirmed its full year earnings guidance. The telecommunications services provider says the growth was delivered in all segments including fixed voice, broadband and energy services. M2 has also confirmed it expects to report full year earnings at the mid-point of its guidance when it releases results on August 25.
Mobile financial services company eServGlobal Limited (ASX:ESV)
(AIM:ESG) has announced a 24 per cent increase to $16.9 million in first half revenue. Half yearly earnings after tax rose to $0.9 million rebounding from a $0.7 million loss in the previous corresponding period.
MOKO Social Media Limited (ASX:MKB)
will list on the US NASDAQ stock market in an effort to raise US$8.25 million. The social media company will list with an American Depositary Share price of US$7.50, each ADS will be worth 40 fully paid MOKO shares. The company says its US mobile advertising business is growing strongly with a 247 per cent increase in monthly sales since December 2013.
Computershare Limited (ASX:CPU)
will take a write-down of about $US40 million following a review of its non-core and non-strategic assets. The software provider says the write-downs are due to the sale of some businesses and the closure of its digital post joint venture with Zumbo.
-- John Treadgold