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Posted by rod@drury.net.nz in TechBiz at 2:10 pm on Friday, 1 September 2006
As predicted by almost all NZ tech insiders, the NZAX listed Tech Stock Plus-SMS has had it’s bubble burst, shares dropping 77% since trading commenced (after a 2 day halt) today.
- No one I spoke too in the industry really understood what they did or how that would make money
- The founders appear to have pulled out 10m each before any revenue came into the company
- How can a company with zero revenue have had a valuation (at one point) greater than $270m? How could investors be that dumb?
- Why did the business media and the NZX allow this obvious time bomb to happen
What really annoys me is these cowboys are potentially screwing the local financial markets for real companies that may follow. I hope this gets investigated.
blog
I’ve been saying for quite some time - “watch out” and now I can say “told you so”.
This train wreck will snap some respectable people back into the land of reality. Pity no-one prevented the mess so the capital market for niche ICT players gets harder in this country.
Keep a close eye on the other recent NZAX listings that are tech based. I hope the same mistake is not made.
Stuff Coverage:
http://www.stuff.co.nz/stuff/0,2106,3783906a13,00.html
Herald Coverage:
http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10399342
1. Media hasn’t picked up on the cash the founders pulled out
2. What insiders brought low and sold high?
What really annoys me is that I did not have a “lazy” $10k to buy some 8cent shares and sell them for 80cents. Bugger. I think we could all see the idea was doomed to fail, just not enough of us were smart enough to take an advantage of the gulibility of punters on the stock exchange. Anyone got a good “sounding” idea that is a little too technical for people to understand????
[...] At least the Sunday Star Times did the first basic bit of an investigation on PlusSMS. Sunday Star Times: Plus SMS: founder sells as firm burns [...]