Megaport shares rocket on ASX debut

Megaport (ASX: MP1) shares delighted early investors today.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in Megaport (ASX: MP1) soared today after the latest technology company to hit the ASX lifted to $1.95 around 56% above the initial public offer price of $1.25 per share.

The business raised $25 million under the terms of the prospectus and at the offer price Megaport would have a market capitalisation of $87.5 million, although it is now around 56% north of that.

The company's prospectus states that its aim is to become a global leader in elastic connectivity and network services interconnection in response to customer demand for flexible bandwith services around Australia and internationally. Its operations are based in Brisbane and it currently has over 200 active customers and has also signed partnership agreements with major cloud services providers and network providers in all markets in which it operates.

In simple terms the company uses what it calls elastic or variable interconnections to allow clients to right-size their connectivity and data use on a customised basis. In other words an enterprise client like electronics retailer JB Hi-Fi Limited (ASX: JBH) can simply ramp up its bandwidth for a given period of time just as it requires more capacity. In exchange JB Hi-Fi will pay Megaport fees for helping provide these kinds of services.

The company currently operates in six markets and four countries and aims to use the cash raised to expand globally with North American and European markets in particular a growth target. For example this sort of expansion requires funds for new staff and marketing costs, with the business attempting to capitalise on what it sees as a first mover advantage in an emerging technology space.

Investors clearly like the prospects of this business and it's not hard to see why. It looks deserving of a spot on the watch list for investors interested in technology companies.

Motley Fool contributor Tom Richardson has no position in any stocks mentioned. You can find Tom on Twitter @tommyr345 Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »