Xure fail! Xurpas crashes below IPO price as investors lose faith
Shares of Xurpas Inc. slipped below their IPO price of P3.97 for the first time, signalling a massive loss of confidence in the technology firm.
From its closing price of P5 on Nov. 10, the stock plummeted to P3.90 Friday following disappointing third quarter results. That means all the investors who bought into the much-hyped stock market debut have officially lost money.
Investor confidence in the company’s growth potential has waned as Xurpas continued its dismal performance. The firm suffered a net loss of P21.27 million in the third quarter on soaring costs, a reversal of the P47.6 million profit reported in the same period a year ago. Operating expenses surged 62 percent to P466.8 million, clipping the 20 percent growth in revenue which was driven by mobile consumer services.
This brought nine-month earnings to P87.45 million, 95 percent lower than the previous year.
Singaporean startup Art of Click, which Xurpas acquired in October 2016, weakened in the third quarter amid the challenges faced by the mobile advertising industry in the region.
Founded by Filipino entrepreneurs Nico “Nix” Nolledo, Fernando Jude Garcia, and Ramond Gerard Racaza, Xurpas had a blazing start, hitting the daily ceiling of P5.95 in its first trading day, which made it one of the hottest stocks since it listed in December 2014. The company raised P1.36 billion from its IPO.
The company embarked on an acquisition binge following its listing, driving its share prices up. The stock hit an all-time high of P19.80 in April 2016 but dived to P7.99 at the end of the year as investors began to doubt the firm’s ability to deliver on its promises.
Analysts and investors are fretting that the costly acquisitions made by the company will fail to live up to their hopes.