How to invest in the MyDeal IPO
The online retailer has launched onto the ASX. Here's how to invest.
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In what has been a very good year for the ecommerce industry, yet another online retailer has joined the growing list of companies set to go public in 2020. After completing a $40 million IPO, Australian company MyDeal launched onto the Australian Securities Exchange (ASX) on 22 October under the ticker code MYD.
MyDeal is a household goods retailer best known for its online marketplace mydeal.com.au. The retailer has sold more than 1 million products so far this year and generated $103 million in gross revenue in FY20 – 164% higher than the previous period.
How to buy shares in MyDeal
MyDeal has listed on the ASX, so you can now buy shares over the stock market. To do that, you'll need to be signed up to a share trading platform. Check out the steps below:
- Compare share trading platforms. To buy shares in an Australian company, you'll need to sign up to a platform with ASX market access. If you're a beginner, look for a platform with low commissions and investment tools to track your portfolio. Narrow down top brands with our comparison table below.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and bank information. Fund your account with a bank transfer, credit card or debit card.
- Search for MyDeal. Find the stock by name or ticker symbol: MYD. Research its history to confirm it's a solid investment against your financial goals.
- Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until MyDeal stock reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. Weigh your budget against a diversified portfolio that can minimise risk through the market's ups and downs. You may be able to buy a fractional share of MyDeal, depending on your broker.
- Check in on your investment. Congratulations, you own a part of MyDeal. Optimise your portfolio by tracking how your stock, and even the business, performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
What we know about the MyDeal IPO
MyDeal's IPO was underwritten by lead managers Morgans and Royal Bank of Canada, and it listed on the ASX on 22 October under MYD. The company went public with an IPO issue price of $1, however its price more than doubled on its first day of trading to a high of $2.20 before falling back to $1.85 by the late afternoon.
At this stage, MyDeal doesn't expect to pay any dividend in the near future. Instead, it plans to reinvest profits back into the company, making this a growth play.
|MyDeal IPO key numbers|
|Total number of shares available under the offer||40 million|
|Proposed ASX code||ASX: MYD|
|Target market cap||$258.8 million|
|Retail offer opens||1 October|
|Retail offer closes||12 October|
|Expected listing on ASX||22 October|
|Expected dispatch of holding statements||19 October|
Source: MyDeal prospectus
MyDeal says it will use the capital raised in the IPO to fund its growth strategy, including the development of mobile apps and the expansion of its white label business.
MyDeal was launched in 2011 by Sean Senvirtne in Southbank, Victoria. To support the business launch, MyDeal raised $150,000 in seed capital within the same year.
This year, it raised another $3.35 million in funding through the issue of convertible notes (which will be converted into shares upon listing).
Today, MyDeal has 40 employees in Australia and the Philippines. Its popular mydeal.com.au website specialises in the sale of discount household items and it currently hosts more than 5 million products online.
MyDeal balance sheet
MyDeal's main source of revenue (84%) is through the commissions charged to sellers on its marketplace. Other revenue streams include seller transaction fees, advertising, seller subscription fees and the sales of its white label products.
The good news is that the company is clearly growing and its bottom line has particularly benefited from the rise in demand for online shopping during COVID-19.
In FY20, the company generated $15.8 million of revenue, up from $5.4 million in FY19 and the company has also seen significant profit growth over the last 12 months. Net profit (NPAT) in FY20 was $849,232, an increase of more than 100% from the previous financial year.
Compare ASX share trading platforms
To buy stock in MyDeal once it lists, you'll need to open a brokerage account with access to ASX stocks. Compare your options using the table below to find the best fit.
Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
How do I buy shares?
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