LiveTiles (ASX: LVT) is leaving the ASX and shareholders are not amused

LiveTiles (ASX: LVT) shareholders are scrambling for the exits after the company announced plans to delist. There had been media speculation that this would happen in light of the company’s lagging share price, even amidst the post-Corona Crash bull market. This morning, the company confirmed this news, outlined why it was leaving, but did not respond to speculation it would re-list elsewhere. 

 

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Who is LiveTiles? 

LiveTiles is an employee engagement software provider. It has offices in Australia, Europe and North America with Melbourne and New York being its two major hubs.  

It listed on the ASX in late 2015 through a reverse take-over that gave it a market capitalisation of $57m and a share price of 21c per share. It reached an all-time high in mid-2018 (of 68c per share), buoyed by new product launches and Annual Recurring Revenue (ARR) growth. But it has never seen those highs again and this morning it crashed more than 50%, to 2.8c a share, capitalising the company at $25.4m.  

 

 

LiveTiles departing the ASX 

LiveTiles announced plans to delist the company, subject to shareholder approval at a general meeting in early September. It gave several reasons, including the low valuation ASX investors attribute to the company and the consequential inability to attract employees due to the minimal value of stock options.  

Despite hints that shareholders would have the option of selling shares to the company, investors headed to the exit straight away. 

If delisted, shareholders in LiveTiles can only sell via off-market transactions. The positive for the company would be reduced reporting requirements, but this would mean far lower transparency for investors compared to measures in place as a listed company. 

 

What will happen next to LiveTiles?  

There has been media speculation that it would either look for a takeover or a listing on the NASDAQ. LiveTiles did not reveal anything in relation to either, both of which would be better than what is happening now – shareholders facing the choice to sell at a massive discount, or not being able to sell shares at all in a few months’ time.  

It is worth noting that the reduction in valuation of Tech companies in the private market is only just beginning. Just look at Canva, which saw its valuation lowered by 36% just recently by Blackbird Ventures. 

So, we’re not certain LiveTiles investors will be better off when the stock is out of the ASX limelight. 

 

 

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