Harmoney's share price has tanked since its November sharemarket listing prompting one investor to send a legal letter to regulators asking them to investigate.
The New Zealand online lender dual listed on the ASX and NZX on November 19 following an Initial Public Offer (IPO) price of A$3.50 ($3.68).
Since then it has fallen to A$2.51 on the ASX and $2.62 on the NZX as of Tuesday's market close although rallied yesterday to close at $2.95.
The Herald understands one New Zealand investor has requested both the NZX regulator and the Australian Securities and Investments Commission look into the price falls, which have come despite no negative announcements from Harmoney and amid a rising sharemarket.
The NZX50 index is up 2.6 per cent since November 19 while the ASX200 has risen 0.8 per cent in markets bolstered by news of Covid-19 vaccines being approved and distributed.
Harmoney's joint lead managers for the IPO were New Zealand investment bank Jarden and Australian firm Ord Minnett.
This week Jarden investment analysts released their first research report with a buy rating on the company and a 12-month target price of A$3.30 - A20c below its listing price.
A spokeswoman for Jarden emphasised its research was fully independent of its investment banking arm. The firm offered no comment when asked whether the IPO was over-priced, considering the now lower valuation from its retail analyst.
The Jarden analyst note said the share price underperformance against its peers and the ASX small ordinaries index likely reflected Harmoney's more modest near term growth outlook compared to peers.
"This largely reflects Harmoney's decision, in contrast to some of its peers, to limit originations in response to macro uncertainty."
But they said loan originations had since bottomed and Harmoney had seen growth of 12 per cent over the first half of November - a rate which they expected would accelerate with the activation of a second New Zealand funding warehouse.
"We forecast [around] 20 per cent year on year volume growth over November - June, with Australia up [around] 40 per cent."
Ord Minnett analysts also initiated research with a buy on the stock and a target price of A$3.90.
The analysts said Harmoney held a technology and customer acquisition advantage versus major banks, allowing it to grow [its market] share and supported by efficient operating systems, can ultimately convert a higher share of income growth to profit.
They forecast a first half result in line with expectations but a likely upswing in domestic credit conditions to confirm a return to 10 per cent plus loan growth from January 2021.
"Trading on a 36 per cent discount to sector peers we see the current price as an attractive entry point."
One institutional investor who bought shares in the IPO said Harmoney's shares were placed into a hot fin-tech market where investors were chasing anything that was in that sector.
"So the pricing may have reflected the enthusiasm."
It's understood some large institutional investors who bought into the IPO sold large parcels down on the first day dragging the share price down and retail investors appear to have followed them out the door.
Deal fatigue by Australian investors who have seen a raft of IPOs come to market in the last few months may also be affecting the share price alongside the Covid environment making new investors feel nervous about debt servicing.
Rival Australian non-bank lender Plenti Group has also seen its share price fall from its A$1.66 offer price in September to trade around A$1.06.
Harmoney has been approached for comment.
On Tuesday Harmoney announced it had secured its third debt warehousing facility - a three-year $200 million facility from asset manager M&G Investments.
It now has $465m in warehouse funding - a key plank in its move away from using retail peer-to-peer lending as a way to fund its loans - a model that is more expensive and resource heavy.
Chief executive David Stevens said the facility would further accelerate its transition to more profitable warehouse funding.
"We are really excited to have the support of this well respected institutional asset manager. Our ability to attract a partner of their calibre and establish a securitisation of this size in a post-Covid market reflects the quality of our business, and the confidence Harmoney continues to earn from fixed income investors."
Harmoney began moving from its peer to peer funding model to warehouse funding in December 2018.
It now has warehouse funding for 42 per cent of its loan book, and expects to be fully warehouse funded by the second half of its 2022 financial year.
Harmoney will announce its maiden result in February.