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%.

The post Openn Negotiation (ASX:OPN) share price up 13% in second day of trade appeared first on The Motley Fool Australia.

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 post Openn Negotiation (ASX: OPN) share price jumps 60% on IPO appeared first on The Motley Fool Australia.