Trade Me founder and tech investor Sam Morgan has slammed a local technology firm's plans to float on the Australian stock exchange.
Christchurch-based Powerhouse Ventures, which commercialises technology from Australasian universities and research institutes through a portfolio of start-ups, is looking to raise up to A$20 million through issuing shares to the public at A$1.07 a piece.
The deal values the company, which hasn't provided any forecasts in its IPO prospectus, at up to A$40.8 million.
Morgan, who made $227 million out of the 2006 sale of Trade Me to Fairfax Media, didn't pull any punches when he took to Twitter today to express his views on the Powerhouse share offer.
Nobody in their right mind should invest in this IPO: https://t.co/O6nf3HOB60 "No track record of sale or spin-out of Portfolio Companies"— Sam Morgan (@samfromwgtn) August 3, 2016
"These sort of crap tech IPOs just ruin it for all the companies that are actually making stuff, selling stuff and have a business model," he tweeted.
Morgan also said "nobody in their right mind" would invest in the Powerhouse IPO as the company had "no track record of sale or spin-out of portfolio companies".
Powerhouse managing director Stephen Hampson said he rejected Morgan's view.
"Powerhouse Ventures has very good track record in commercialising university research IP," Hampson said.
"We appreciate it is early in the businesses' life cycle, however, the 19 companies we are working with are all progressing very well and we need further capital to help them now, and we have the opportunity to expand our business into Australia."
He said companies including Hydroworks, Crop Logic and Upstream MedicalTechnologies were examples of the company's success to date.
These sort of crap tech IPOs just ruin it for all the companies that are actually making stuff, selling stuff and have a business model.— Sam Morgan (@samfromwgtn) August 3, 2016
In a statement released yesterday, the company said it had a strong record of growth and success through its portfolio of early-stage to established New Zealand businesses operating across sectors including engineering, cleantech, healthcare, agritech and ICT.
"Powerhouse gives investors not only the ability to diversify their investment portfolio but also invest in some of the best intellectual property New Zealand and Australian universities have to offer via a company that has a proven model of identifying intellectual property and transforming it into exciting companies with genuine international opportunity," said Powerhouse chairman Kerry McDonald.
Explaining the decision not to include forecasts, the prospectus said the firm was in a growth phase, meaning prospective financial information would be too difficult to predict.
Powerhouse shares are expected to begin trading on the ASX on September 28.
Hampson said the offer had already received good interest on both sides of the Tasman.
"However, there is a better appetite across different investment groups in the Australian market than in NZ at present."