One of the few Canadian technology companies to go public in 2015 has failed to see much of a lift in its stock price one year after listing on the TSX.
Mogo (TSX:GO), a Vancouver-based financial technology company that offers small loans through electronic transfers, raised $50 million through its initial public offering. Upon opening, Mogo stock was valued at $10 per share , but quickly dropped 5%. As of 8:27 Pacific time May 13, shares were trading at $2.25, down from a market open of $2.27.
Mogo reported its first quarter revenue grew to $12.7 million, a 39% year-over-year increase, and loan interest revenue grew 139%. The company has a net loss of $5.6 million.
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In January, the startup announced an advertising deal with struggling newspaper chain Postmedia (TSX:PNC), the owner of the Vancouver Sun and Province as well as dailies in several other Canadian cities. The announcement briefly boosted the share price to $4.90 per share.
Under the deal, Mogo pays Postmedia a 4% share of existing revenue and an 11% share of incremental revenue, in exchange for $50 million in advertising for Mogo on Postmedia’s media platforms. As part of the deal, Postmedia bought $1.2 million worth of Mogo shares.
Making the first revenue sharing payment to Postmedia increased Mogo’s marketing expenses by $200,000, from $2.2 million in the first quarter of 2015 to $2.4 million in the first quarter of 2016.
- With files from Tyler Orton
@jenstden
