Mad Paws IPO: A pet-tacular debut
The Aussie pet-sitting company saw its share price jump 54% at its stock market entrance.
It's no secret that Australia loves pets, and it seems investors are no exception.
Small cap firm Mad Paws (ASX: MPA) has today listed on the ASX from 11am following a $12 million IPO with a target market cap of $42.9 million.
At the time of writing, the MPA share price had surged as much as 54% from its IPO price of $0.20 to $0.31 per share.
The Mad Paws platform connects people with pet sitters, a service that will arguably be ever more needed with pet adoption having exploded during COVID-19 lockdowns.
The company was founded in 2014 and has so far booked over 180,000 services during that time. Its primary revenue comes from service and booking fees. However, it's also looking to grow other pet services, including pet insurance and pet meal subscriptions.
Is it a buy?
Australia has one of the highest pet ownership numbers in the world, with around 29 million pets registered as of 2019. That number will have most certainly gone up with pet adoption numbers reportedly skyrocketing during lockdowns.
As people filter back into offices, Mad Paws is in a unique position to take advantage of that trend. The app allows you to make online reservations where a pet sitter will either arrive at your home or take your pet-baby home with them. Anxious parents can even get photo updates through the platform of their pet.
In each booking, Mad Paws takes home a 20% service fee and a 7% booking fee, while subscription to the service is free.
However, the company is not yet profitable, so you can't expect dividends at this stage. Mad Paws saw almost $2 million in revenue in 2020, up from $1.5 million the year before, with a $3.1 million after tax loss. Essentially, Mad Paws is a growth play rather than a value investment.
According to the prospectus, the firm plans to use its IPO funds to launch other pet services and grow newly added business arms, including pet meals subscription Mad Paws Dinner Bowl.
How to buy Mad Paws shares
It's too late to invest in the IPO itself as Mad Paws has now listed on the ASX. So to buy shares in the company you'll need to be signed up to a stock broker.
However, it pays to be aware that stocks in the weeks following an IPO can be extremely volatile. While some investors will race to jump on the bandwagon, others seek to take advantage of the hype by buying in early and then selling once the price reaches an acceptable height.
This week we saw the newly listed Airtasker (ART) share price jump as much as 70% on the day of its listing, only to crash 20% two days later.
If you're willing to brave the volatility, the cheapest option here is to sign up with an online share trading platform (also known as an online broker). You can check out a list of brokers available in Australia on our comparison table – just ensure you select a broker that offers Australian (ASX) stocks.
Once you sign up and transfer funds, you can search for the company name or ticker code, then select a "buy" order.
Looking for a low-cost online broker to invest in the stock market? Compare share trading platforms to start investing in stocks and ETFs.