Accountant Kickback Claim, As Guvera Streaming IPO Hits Muddy Waters
The controversial $300 million sharemarket float planned by Queensland online music streaming service Guvera may be in danger of flopping, following heavy criticism by market observers and – more recently – Atlassian cofounder Mike Cannon-Brookes. Seek co-founder Paul Bassat did not name the company but also recently blasted Australian would-be tech floats he described as “egregious” and “short on management experience.”
Guvera is seeking to raise up to $100 million, valuing the company at up $1.3 billion, despite a string of losses in recent years including a net loss of $81 million on revenue of $1.2 million in the 2015 financial year, and a loss of $29 million in FY2014.
Feeling particularly nervy are scores of accountants who have helped clients set up self-managed – and possibly dodgy – super funds to invest in Guvera after the accountants in some cases received kickbacks, according to an Australian Financial Review report.
The Fin says it has been contacted by “numerous industry sources” who allege some accountants were offered payments to persuade clients to invest in Guvera. That door will be partly closed on July 1, after which accountants wishing to recommend stocks to their clients will need to hold an Australian financial services licence and reveal any incentives they receive.
If Guvera fails to raise sufficient capital under the prospectus, there is “significant uncertainty whether Guvera will be able to continue as a going concern,” the company said in its prospectus – meaning investors might well lose their money, and the accountants will doubtless feel their fury.
On the other hand, if the ASX float succeeds, the punters could still lose due to a below-par share price – but if things go well founder Claes Loborg is expected to emerge with a stake worth $144 million while CEO Darren Herft will have $98 million in shares, plus 28 million options.
Many market watchers are less than impressed. Cannon-Brookes, after being sent the prospectus, at the weekend tweeted: “”Was pitched. Read Guvera prospectus. Terrified. No revenues? Little growth? Dodgy loans? ASX shouldn’t allow this stuff.”
Niki Scevak, a partner in one of Australia’s largest tech start-up funds, Blackbird Ventures, was in similar vein, tweeting that the IPO plan is “horrifying – and more dollars than entire credible Aussie venture capital industry.”
Guvera hopes to begin trading on the ASX on July 18.
The ASX is currently considering changes to its listing regulations, which would clamp down on early-stage tech companies with little in the way of income or profits getting a listing.