Openn Negotiation (ASX:OPN) share price up 13% in second day of trade

The online real estate auctions hosting company outperformed again today.

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Online auctions company auctioneer holds wooden gavel over small plastic model house

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The Openn Negotiation Limited (ASX: OPN) share price has been soaring today after first listing on the ASX yesterday.

Its successful initial public offering (IPO) yesterday saw the share price jump from its offer price of 20 cents to a closing price of 31 cents.

Today, more than 11.7 million shares changed hands, with the Openn share price finishing the day at 35.5 cents, up 12.9%. It hit an intraday high of 43.5 cents at lunch time.

Let’s take a closer look at how the first two trading days unfolded for Openn.

What is Openn Negotiation?

Openn is a cloud-based property platform that hosts online real estate auctions.

To date, Openn has facilitated more than $2 billion in Australian property sales. The platform is used by more than 3,000 agents across Australia and New Zealand.

The company’s revenue model sees it derive income from property listing fees on its platform. This comes in at $500 per property.

It also receives revenue through an agent training segment that instructs agents how to use the platform. Only trained agents can list properties on Openn.

As part of its prospectus, Openn outlines $851,402 in revenue for FY2020 under this model, which translates to a pre-tax loss of about $1.2 million.

Openn’s IPO success

The initial offering for Openn Negotiation shares was 20 cents a piece, according to the prospectus.

The company listed with an initial valuation of $38 million, and hoped to realise $9 million from the equity raise.

Based on today’s closing price, Openn’s market capitalisation has grown to $41.3 million.

Given its IPO success, Openn intends to use the raised funds for domestic market expansion.

The company might also establish a footprint in the US in the future.

Foolish takeaway

The Openn Negotiation share price is skyrocketing in the secondary market since its IPO yesterday.

Investors are enthusiastically buying into the Openn Negotiation growth narrative.

Online auctions have become much more accepted over the past year due to extensive use by agents during COVID lockdowns.

The Openn Negotiation share price has outperformed the S&P/ASX 200 Index (ASX: XJO) today, with the broad index up 0.9%.

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The author Zach Bristow has no positions in any of the stocks mentioned. 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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