Shares in property crowdfunder, DomaCom, have plunged to less than half their offer price since floating early this month after a number of investors headed for the exit door.
Now a $24 million minnow trading at 29 cents a share, DomaCom stock had an initial offer price of 75c before its float on the Australian Securities Exchange (ASX) on November 7.
DomaCom raised $7.3 million, giving it a market cap somewhere above $80m.
Trouble hit on the first day when some of DomaCom's original investors made a fast break for liquidity, pushing the offer price down to 40c.
About 500 new investors bought into the float, joining about 200 existing investors.
"It was a small number of original investors who been in for four years and for their own personal reasons needed some liquidity and took the advantage," chief executive Arthur Naoumidis told The Australian Financial Review.
"Clearly, I was disappointed they did it on day one because that set the scene."
There was further pressure on the price early last week when one disgruntled investor, with 3.6 per cent of the stock, began selling down their stake after being denied a seat on the board.
Mr Naoumidis said those sell-downs had a big impact on the stock price given its relatively shallow register.
The price collapse had overshadowed recent good-news announcements, including DomaCom's rating approval from research house Lonsec and a listing agreement with AMP Capital's SuperConcepts platform for self-managed super funds.
Mr Naoumidis advised shareholders to "relax" and not worry about the stock price because it would eventually "reflect our business".
"Things are going well,” he said.
“We've made two major announcements that no one's noticed. Our momentum, now that we are listed, is going to accelerate," he said.
The DomaCom platform allows investment in fractions of real property through collective investment schemes and crowdfunding.
Its offerings target self-managed super funds and are on the approved product list of 41 financial adviser groups.
Earlier this year, before listing, DomaCom hit the headlines with an ambitious bid to buy Australia's largest landholder S.Kidman and Co with a $410 million crowdfunding campaign
This month DomaCom reported it $20 million in funds under management after bookbuilds for 32 properties, including pastoral holdings in Queensland.
- This story first appeared in The Australian Financial Review
