iSelect listing disappoints as shares slide Date June 24, 2013 - 1:06PM 118 reading now (117) Read later Brian Robins, Madeleine Heffernan
One of the market's most heavily hyped floats of the year, iSelect, has made a dismal debut, with investors who put funds into the issue suffering up early losses.
The shares commenced trading at midday, with the initial trade at $1.76, well below the issue price of $1.85.
They continued falling in early trading, changing hands at as low as $1.60 soon after the open.
The company has tried to list a few times but weak market conditions forced it to continue to raise funds privately before it decided to test the water with a sharemarket listing this year.
Advertisement The company operates a comparison website which compares the cost of products such as health insurance, along with other insurance products such as life and car insurers, along with some lending products and utilities such as electricity and telephones.
It collects commissions for products sold through the website.
However, the ease with which competitors can emerge has kept potential buyers on the back foot, especially with many of the original backers exiting the stock with the public float.
Among top shareholders is iSelect founder Damien Waller who emerged with a 9 per cent stake. At current market values Mr Waller's holding is $37.3 million for his 23.35 million shares held in the company.
Based on the $1.85 issue price, Mr Waller is down $5.7 million on his holding, although he would have invested at significantly lower prices.
Others include US-based private equity fund Spectrum with a 7.6 per cent stake and Melbourne-based venture capital fund Starfish Ventures with a more than 2 per cent.
A private investment company linked with Computershare founder Chris Morris has more than 2.58 million shares. A funds arm linked to AMP has more than 3.74 million shares.
Executive chairman and co-founder Damien Waller said the IPO was the "culmination of a lot of hard work and dedication from the 430-strong iSelect team. Today's milestone represents the next step in a much longer journey for iSelect. We see a great deal of opportunity and growth ahead of us."
CEO Matt McCann said: "We strongly believe iSelect is well positioned to capitalise on the continued growth in Australian online comparison and the attractive characteristics of the underlying markets we serve."
In a note by broker SelectEquities earlier this month, analysts Danny Goldberg and Phuong Huyng said: "We don't think this is a cheap offer price, but we think that the underlying growth and positive investor sentiment for companies with an online business model is likely to provide significant investor appetite and potential upside."
