Shares plunge within minutes.
In Thursday afternoon trade, Kogan shares were down 11.4%, or 20.5 cents, at $1.59, having hit a low of $1.495 earlier in the afternoon. Shares opened at the $1.80 issue price and slipped 10 cents to $1.70 in the first 15 minutes of trade on the Australian Securities Exchange (ASX).
Commenting on the drop, Forager Funds senior equities analyst, Daniel Mueller told local media, “Obviously a disappointing debut, the IPO [initial public offering] in terms of itself was quite high relative to traditional bricks and mortar retailers.”
“I think with some of the retailers they have had some of the structural headwinds – the impact on retail in the last ten years – that fragmentation of bricks and mortar to online and also just that proliferation of competition – they’re very competitive spaces.
“Kogan with an online only model has a very strong brand awareness and competitive position but, in saying that, online there’s very few barriers to entry and there’s not a lot to stop other retailers from opening up their own online stores,” he added.