The story of WiseTech's IPO success
While a great number of technology companies tend to struggle to keep stock prices level with initial public offering (IPO) rates, one Australian company is bucking this trend. WiseTech Global was catapulted by investor interest after its recent debut, sending its value quickly past 1 billion dollars in the Australian Securities Exchange.
WiseTech is a supplier of technology to logistics companies. The company offered stock on April 11, 2016 in its IPO at A$3.35 a share and raised about $168 million. To start, over 50 million shares were offered with an initial market value of A$974 million. By midday is was at A$3.41, a premium to its IPO price.
A Rare Standout in a Skittish IPO Environment
The stock climbed 14 percent higher despite the ASX 200 index ending lower. This impressive debut was also in spite of investor apprehension about new floats. As of April 13, WiseTech stock was at A$4.05.
Investors have been generally wary about similar IPOs that seem to have gone public too quickly. However, WiseTech is a standout due to some important key factors: it is large, global, and profitable.
In the recent past, Australia has experienced a lack of available venture capital, leaving many companies craving cash. Launching IPOs in some cases is a bid to seem valid when the company actually isn’t ready for this move. Many of these businesses were too small and not profitable.
WiseTech, however, is a different breed than these smaller fish.
Walking the Talk: WiseTech Shows Experience, Growth Plans and Profits
WiseTech’s revenues for the second half of 2015 were A$48.59 million, and a net profit of A$3.12 million. This is pretty impressive for a company that was founded in the CEO’s basement in 1994 on a credit card. CEO Richard White currently owns a 50 percent stake in WiseTech stock
The company's growth plans revolve around improving operations in logistics companies by providing technology to streamline operations. They are working on an entire set of logistics components for third party businesses so that higher levels of service are possible for clients at reduced costs.
While WiseTech is not without critics – some think the IPO was overpriced and the management too green – White says the WiseTech management team is experienced in bringing top talent into the company. With a track record of satisfied customers and the profits to show for it, WiseTech is a true IPO success story and one to watch.