ChaosMusic to float
- — 11 November, 1999 21:49
Online music store ChaosMusic will use cash raised from its public float to boost its resources in the face of an expected marketing assault from US competitors.
The company plans to raise $15 million through a public issue of up to 15 million shares.
The proceeds of the offer, which opens on November 12, will be used to partially fund the acquisition of offline music store, Gaslight Music, develop ChaosMusic's online services, and expand its network of partner and affiliate Web sites.
However, ChaosMusic founder and CEO, Rob Appel, said "most importantly", the float would boost the company's resources in time to take on the over-financed marketing prowess of the large US online music stores such as CDNOW and Amazon, which will launch Australian sites soon.
Through the acquisition of Melbourne-based music retailer, Gaslight Music, ChaosMusic will acquire an offline presence with established relationships with major suppliers -- reducing the time and cost of delivery for online consumer orders.
Appel said he also plans to use the money raised from the float to develop and define the company's Web presence, and to improve customer services and technologies.
Six Australian IT companies, including Iocom, Lake Technology and Technology One, are listing with the ASX this week.
Joint chief executive of Ord Minnett, Gordon Fell, said despite the volatility of IT stocks this year, the rush to raise finance through a public listing did not surprise him. Fell said both ASX and NASDAQ were up since the launch of IT stocks such as travel.com earlier this year, and expects the positive results to continue.