Openn Negotiation (ASX: OPN) share price jumps 60% on IPO

The real estate technology share is having a great first day on the ASX.

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The Openn Negotiation Limited (ASX: OPN) share price is rocketing on its first day on the ASX.  

Shares in Openn Negotiation began trading at midday today. They are currently trading at 32 cents apiece, 60% higher than the offer price in the company's prospectus of 20 cents.

Openn Negotiation is a property technology company. Its cloud-based Openn platform allows for real estate auctions to take place in real time and for private treaty offers to be submitted in a transparent manner.

So far, the platform has overseen more than $2 billion in property sales and is used by more than 3,300 real estate agents throughout Australia and New Zealand.

Let's take a closer look at Openn Negotiation's first foray onto the ASX.

More about the Openn share price & IPO

As part of its prospectus, Openn Negotiation offered 45 million shares for 20 cents apiece.

On listing, the company has approximately 191.7 million shares outstanding. At 20 cents apiece, that gave Openn an expected market capitalisation of around $38 million.

At its current share price, Openn Negotiation has a market capitalisation of around $57.5 million.

The company expected its initial public offering (IPO) to raise $9 million before costs.

Openn Negotiation plans to use the funds to expand its market in Australia and New Zealand and to assess the market in the United States. It plans to enter the US market in the future.

The company did not include financial guidance in its prospectus as it didn't believe it could prepare reliable forecasts.

The company's full-year results for the 2020 financial year saw it bring in $851,402 and operate at a loss of around $1.2 million before tax. Openn also had $668,979 worth of assets and $448,975 in borrowings.

Currently, 90% of Openn Negotiation's revenue comes from the fees it charges to upload properties onto the platform. It costs an agent $500 to upload a property onto the Openn platform.

It also derives revenue by training real estate agents to use the platform – a service that comes with a price tag of $135.45 per agent.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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