Positive reaction to NZX-listed Snakk
Internet company, Snakk Media, debuted on the share market this morning, and investors appeared to like the taste.
Its shares went up more than 400 percent, rising from 6¢ to 28¢ on the NZX's alternative market for small companies.
It's the first of what's expected to be a busy year for new listings, and came on the day the US' Dow Jones hit an all time high.
You could describe Snakk as a minnow compared to the whale that is Mighty River Power. But it still made a splash as the local market's first listing of the year.
“I am a firm believer that New Zealand start ups need to think global, very early on, especially in technology and media,” says Snakk chairman Derek Handley.
Snakk helps companies advertise on smartphones and tablets, and it suits.
“It's the type of company that we absolutely want to list on NZX – entrepreneurial, potentially global,” says NZX chief executive Tim Bennett. “A really innovative product.”
Snakk has around 2000 shareholders and plans a capital raising by mid-year to fund its growth in Australia.
Its debut comes as the New Zealand market hits five-year highs. Why? It is in part by the US Federal Reserve pumping $85 billion a month into the US economy by buying debt.
“When you get a whole pile of money like that, chasing the same assets, the same companies, the same bunch of investments, of course prices go up,” says Tower Investments chief executive Sam Stubbs.
There is a lot of money out there waiting to invest. New Zealanders have more than $100 billion saved with the banks, but with term deposit rates falling, some of that money is being put into the share market.
Mr Stubbs has three questions for anyone who is thinking of investing.
“Am I putting all my eggs in one basket or am I spreading that risk? The second question is, am I happy to own this for the long-term? Am I happy to own this investment in the bad times as well as the good times, which we are currently going through? And the third one really is, do I understand what this investment is about? Do I understand how the company makes money?”
He says the higher the market goes, the more careful you need to be.