Tech firm sizzles on trade debut

Shares of mobile content provider Xurpas Inc. sizzled on the company’s stock trading debut Tuesday as investors shared the company’s bright prospects on mobile Internet usage in the Philippines and other neighboring emerging markets.

Xurpas, which listed on the PSE under the ticker “X,” saw its share price surge by nearly 50 percent as soon as the market opened and remained at such level until closing bell. It ended at P5.95 a share, up 49.87 percent from its initial public offering (IPO) price of P3.97 each. About P108.3 million worth of Xurpas shares changed hands.

The company raised P1.36 billion by selling about a fifth of its stocks to the public. The IPO was priced at 18 times the projected earnings per share for 2015 while elsewhere in the world, technology firms like Google are trading at price-to-earnings multiples of 30 to 33 times.

“The strong performance of Xurpas did not come as a surprise given the attractive growth prospects of its business, solid track record of the company and reasonable valuation during the IPO,” said April Lee-Tan, head of research at leading online stockbrokerage COL Financial.

“I believe that they did everything right. They have the right business, the right business model. They’re very personable. They went out (to market) at the right time, at the right industry—because technology is the fastest industry. And even better, the subset of casual gaming is the fastest-growing tech subset and that’s exactly where they are. They have a bullet-proof business model,” said Ricky Galang, president of SB Capital Corp., which is the sole issue manager and bookrunner and lead underwriter.

Ahead of the retail offering, the IPO book was four times oversubscribed by institutional investors and by the time the public offering started, the offering was oversubscribed by 6.5 times the offer size, Galang said.

“I think being the only fish in a pond creates some scarcity,” Xurpas chief executive officer Nico Jose Nolledo told reporters after the listing ceremonies.

In Southeast Asia where there are very few consumer technology companies with the opportunity to go public, Nolledo said Xurpas was excited to be given this opportunity. Being a public company gives Xurpas better standing to seek out partners for potential overseas expansion, he said. Doris C. Dumlao