HotCopper off to solid start

Shares in HotCopper Holdings got off to a bright start today after the investor chat forum listed on the ASX, with the stock closing up at 26.5 cents.

HotCopper raised $12.2 million in its initial public offering at 20 cents per share, with the shares peaking at 27 cents amid heavy trade, with nearly 5 per cent of its stock changing hands.

Most of the IPO proceeds were paid to the vendors of the online business, which was previously held through private company Report Card.

The listed company has retained net proceeds of $1.7 million to fund the growth of the business.

Its core asset is an investor chat forum, which has experienced growth in unique visitors to 623,000 in May 2016.

This has translated to solid growth in sales revenue, which was forecast in the company’s prospectus to reach $2.58 million in the year to June 2016 and $2.69 million in the year to June 2017.

However, net profit was expected to deteriorate from $593,000 in FY15 to $527,000 in FY16, before slumping to a net loss of $609,000 in FY17.

HotCopper’s revenue is sourced almost entirely from advertising, including traditional banner advertising and email campaigns to the chat forum’s users, who are typically active stock market traders.

The company plans to investigate new revenue raising opportunities, including its use as a distribution platform for company research and capital raisings by listed companies.

The company is led by Sydney-based chairman Steve James, who has a background in online stockbroking and currently works for the Commonwealth Bank.

His fellow directors are Alec Pismiris and Geoffrey Reilly, who are also directors of lead manager Somers & Partners.

The prospectus disclosed that the company is conducting an executive search to replace managing director Greg D’Arcy, who left at the end of July.

The vendors, including investors David Argyle and Ric Indisrie and CPS Capital Group director Tony Cunningham, have collectively retained a 44 per cent stake in the listed company.

In other listing news, Singapore company Dropsuite has lodged a prospectus to raise $8 million as part of its reverse takeover of Perth-based company Excalibur Mining Corporation.

Dropsuite is a cloud-based software platform that enables small businesses worldwide the ability to backup, recover and protect their digital assets.

It had 100,000 paid users in August 2016.

Melbourne based Novus Capital is acting as the Lead Manager and Sponsoring Broker to Dropsuite. 

Dropsuite chief executive Charif Elansari said he was very pleased to be in the process of transitioning into a listed company.

“There are 30,000 websites hacked daily, and 62 per cent of SMEs do not routinely back up their data," he said.

"We have developed cost effective backup and recovery solutions that are both feature-rich and complexity free, to help users protect and backup their website, email, mobile or server data.”