Adelaide-based company Digislide, which makes miniature projection technology, has listed on the Australian Securities in a $4 million float that is tipped to mark the start of a rush of new initial public offerings.
The company, which makes a range of small (typically hand-held) projection devices, offered $3 million worth of shares at $1.25 each, while a further $1 million was raised via two large investors. But the company’s shares listed at 80c and dropped a further 36c yesterday to close at 44.5c.
But chief executive Luceille Outhred believes the first-day slump was the result of a number of long-term investors exiting the business. Digislide was formed in 2003 through the acquisition of two early-stage technology companies, with the investors in these companies given Digislide shares.
Outhred says a number of these investors called prior to the float to explain they needed to sell.
“We fully appreciated that some people had school fees and some people have lost jobs. They needed to sell and they sold,” she says.
For Outhred, even managing to list is an achievement, given the problems that the company has getting its listing through during the biggest financial crisis in decades.
“It was a nice end to the period time that we’ve been living through. It was painfully slow and we had to watch very carefully that we didn’t slip back into the deep dark trough that was happening in the world,” says Outhred.
“It was certainly very satisfying for the founders and our shareholders.”
The company has three main revenue sources: manufacturing devices under its own brand; embedding its technology in laptops, mobile phones and other electronic devices; and intellectual property licensing.
While revenue remains low – just $1.6 million in 2007-08 according to the company’s prospectus, with $1.5 million coming from Government grants – Outhred says the company’s potential is huge.
She says the mobile display market which Digislide is aiming at is worth over $US300 billion and the company is already working with mobile phone companies and computer manufacturers, including Chinese group Haier.
“Any one deal in one segment would blow projections into ridiculous proportions.”
Outhred says two mobile phone manufacturers have already put projection technology into phones, although quality remains an issue. However, the company Digislide works with hopes to release a phone with embedded projection technology in late 2010 or early 2011. Laptops embedded with projection technology could be released on a similar timeframe.
In July 2008, Digislide and Haier displayed a laptop with projector embedded at a Chinese technology show. Outhred says the feedback was good and while the deal with Haier is only a development venture at this stage, it is proof that these technologies are being actively pursed by big companies.
She says the extra capital provided through the float will allow Digislide to speed up its development, simply be giving it the resources to pursue more than one opportunity at once.
“It enables us to do things in parallel where we’ve had to do them in sequence.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
