Search engine looking for local interest
- — 09 February, 2000 16:53
While the company will not be selling any new shares as part of the local listing, the move would make it easier for LookSmart to raise funds through the local market in the future, according to LookSmart International co-founder and CEO Evan Thornley.
Speaking from the US, Thornley said he expected the compliance listing to increase the liquidity of LookSmart's stock as Australian investors take advantage of selling via the ASX. This would allow more Australians to become stakeholders in the company, he said.
"While we already have a lot of Australian shareholders, there are a lot of other institutions and individuals that we believe would like to take an interest in the company," Thornley said.
Thornley, who with his wife Tracey Ellery founded LookSmart in Melbourne in 1995 before relocating to San Francisco in 1997, said it was a fundamental part of the company's strategy to build its profile as a provider of search and navigation tools to other Websites - as well as building on the www.looksmart.com brand.
Chris Smith, associate director with corporate finance company Ord Minnett, said he could see only two reasons behind the compliance listing -- to boost the company's local profile, and allow it easier access to raise capital through the ASX in the future. He said he did not believe LookSmart's share market tactics would set a standard for future Australian Net startups.
Smith claimed prohibitive costs (approximately $1 million in legal fees alone), strict entry criteria, and a lack of investor interest in stocks valued under the $100 million mark, would restrict a majority of local companies from trying to emulate LookSmart and look for an initial listing on the Nasdaq.
"Every company has aspirations to list on Nasdaq, but only a small number of companies are likely to be successful in their attempts," Smith said.