The highs and lows of technology stocks in Xero’s shadow
Technology stocks are making big strides on the NZX just as Xero prepares to quit the local exchange.
Eight technology firms jumped straight onto the main board of the exchange by listing in 2013 and 2014 following Xero’s strong sharemarket performance.
The companies – Eroad, Gentrack, ikeGPS, Orion, Serko, SLI Systems, Vista and Wynyard – raised a total of $380 million from their investors in their initial public offerings (IPOs).
The total value of the shares sold in the IPOs is now $341m, based on share prices on the NZX yesterday morning, representing a combined loss of $39m.
That tally does not include tech star PushPay and Plexure, both of which graduated to the mainboard from the junior NZAX exchange, or Diligent, which listed shortly after Xero in 2007 and was later acquired for a substantial premium.
Most of the eight companies that listed in 2013 and 2014 are well off their lows.
The exceptions are Christchurch search software specialist SLI and Orion Health, and security software firm Wynyard which collapsed into receivership in 2016.
The last day of NZX trading in Xero shares is January 31. After that date, Xero shares will trade only on the Australian Securities Exchange (ASX).
How they have fared:
Eroad raised $40m from its IPO in
2014 when it sold shares for $3. After dipping below $2 in 2016 and
2017, shares in the transport technology firm are now back near their all-time high, close to $4, boasted by its sales growth in New Zealand and North America. Shares up 30 per cent since IPO. Gentrack quickly recovered from a wobbly start on the NZX when it missed forecasts immediately after listing, denting investor confidence in the stock. The business software firm – which is a junior rival to the likes of SAP – had a long history of profitable growth before it raised $36m in its 2014
ikeGPS was the smallest of the technology companies to jump straight on the main board when it raised $25m from its IPO in 2014. Its share price slid 80 per cent before a partial recovery this year, which has been driven by higher sales of its handheld computers, which are used in the building trade and by utilities and the military to record and model objects.
Shares down 63 per cent since IPO.
Orion Health was the last and largest business in the ‘‘group of eight’’ to float, but its financial performance has disappointed since it raised $125m in its 2014 float, when it sold shares at $5.70. The company manages more than 100 million health records for patients around the world but investors are waiting to see whether it can stem its losses and return to profitable growth without tapping them again for more funds.
Shares down 84 per cent since IPO.
SLI Systems raised$27m from its IPO in 2013 when its shares sold for $1.50. The company makes software that helps e-commerce firms manage e-shopping sites but has experienced slow growth, not helped by the demise of customer Dick Smith. Its shares are languishing near their low of 18 cents as it prepares to switch tack to a new way of selling its software that employs a more ‘‘self-service’’ approach.
Shares down 85 per cent since IPO.
Serko was the best-performing stock on the NZX in 2017 after reversing a slide that saw its share price fall to 25 cents – down from their 2014 IPO price of $1.10. Shares in the travel management software firm rose to a high of $2.62 on the back of it moving into profit and striking more overseas deals.
Shares up 120 per cent since IPO.
Vista has found a profitable global niche selling software to run cinemas and was well-established before it listed on the NZX in 2014, raising $40m. In common with Gentrack, it has been a quiet achiever.
Shares up 155 per cent after IPO (taking into account stock split).