Shares in Airtasker, the user-generated services directory, have soared on its market debut but an analyst has warned those thinking of seizing shares.
Airtasker shares were on Tuesday trading higher by 58.46 per cent to $1.03 at 1503 AEDT, making the business worth $255 million, after earlier fetching a high of $1.16.
Shares had sold for 65 cents in the initial public offer, which raised $83.7 million from institutional and retail investors.
Chair James Spenceley was asked for the price he hoped the stock would reach by the close of trade.
“It’s hard to say, but if it holds where it is, that would be an incredible result,” he said while Airtasker was trading for 99 cents.
“What we hope for is we’re going to be able to make great decisions and grow the business.”
The company will use the funds raised from investors to help expand overseas.
Airtasker has offices in Ireland, New Zealand, Singapore, the UK and the US.
Former Macquarie banker Tim Fung founded the business in 2011.
Airtasker is like many early-stage technology companies in that it is yet to make a profit, and the company posted a $10.3 million loss in its 2020 financial year.
Yet Mr Spenceley was optimistic and said the business had been cashflow positive since May last year.
He also cited the financial benefit of the user-generated model, in which people post messages seeking and offering services, and arrange payment themselves.
“There’s no human intervention from us. No sales team,” Mr Spenceley said, adding that this provided a gross profit margin on transactions of 93 per cent.
ThinkMarkets analyst Carl Capolingua said the Airtasker team could be happy with the debut.
“But now the hard work begins to deliver on these expectations,” he said.
Mr Capolingua cautioned people thinking of rushing to buy the stock.
“In my experience, after the excitement dies down there is usually an extended period where the share price is quite subdued,” he said of newly-listed companies.
Mr Capolingua said investors would not have any information to justify the share price rise until the company reported its financials.
“The risk is people get excited and think the share price will be higher next week, and that’s not how these things work,” he said.
The company’s listing had been scheduled for Monday, but a human error at the ASX caused it to be delayed to Tuesday.
Mr Spenceley was in a forgiving mood.
“It definitely cost us money and with the moving of the event, a lot of people couldn’t come,” he said.
He said lawyers for Airtasker pushed the market operator over the weekend to explore every possibility of listing on Monday, but to no avail.
“Everyone makes mistakes. The ASX stepped up and owned the problem,” he said, and confirmed no legal action would be action.