Online retailer, Kogan.com has begun trading on the ASX on July 7, but has seen a slip in its share price from an opening of $1.80 at 12pm down to $1.57 two hours later.
Using the ticker KGN, the online retailer had to push its listing date back one week after it was required to make changes to its prospectus.
The IPO placed $168 million market value on the online retailer and it also plans to raise about $50 million, which will be used to invest in new products and categories as well as marketing. CEO Ruslan Kogan will remain the majority shareholder with 50.5 per cent, and COO David Shafer will retain 19.1 per cent in Kogan.com.
“By focusing on our customers and funding our growth from cash flow, we have been EBITDA positive since inception. Kogan.com has enjoyed strong growth for the past 10 years and up until this point - it has never had any external equity funding,” Ruslan Kogan, said. “At Kogan.com some of our competitive advantages include our brand, proprietary technology infrastructure and operations systems.”
“It’s in our DNA to start new initiatives small, prove their value, and scale them organically in a profitable manner. We subscribe to the philosophy that ‘revenue is vanity, profit is sanity.’”
Kogan said he was mindful of both short term targets and long term returns for shareholders and its decisions will continue to be shaped by the most efficient use of capital.
He highlighted two specific growth initiatives including growing into new verticals such as Kogan Travel and Kogan Mobile as well as integrating Dick Smith assets, which were bought in April.
The acquisition of Dick Smith’s online assets saw Kogan.com add 1.3 million active subscribers who were not previously members of the online retailer’s customer database. As of December 31, Kogan counted 2.3 million email subscribers.
It has also appointed Greg Ridder as non-executive chairman and Harry Debney as non-executive director. Canaccord Genuity is the lead manager and underwriter, and Arnold Bloch Leibler is the legal adviser.
Kogan kicked off the business in 2006 from a garage selling private label LCD TVs.