Join Australia's most dynamic and respected property investment community

..Kogan.com..

Discussion in 'Living Room' started by willair, 13th Jun, 2016.

  1. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    1,717
    Location:
    Brisbane..
    I guess a lot of people would know about this Australian Company built from a household garage..

    There was a prospectus lodged with the Australian Securities and Investments Commission on the 9th june..

    The end game is it prospectus is approximately 28 million shares .

    The offer price is $1.80 to raise 50 million,depending on how one thinks something like this 50/50 can become more powerfull or go nowhere,and as i target companies like this it may pay just to have a read about the "MAN" who started this off because..

    ,i like a simple quote i have read while i study the mindset,,I'm nobodies "Bitch",that to me tells a lot about the mindset and the company and as we are all different some want their hands held and drink homebrew,and this is not advice i can't even write a sentance or spell more then ten words,but i intend to give this float a hammering..
    "imho"..
    Upcoming floats
     
  2. Blueskies

    Blueskies Well-Known Member

    Joined:
    24th Aug, 2015
    Posts:
    196
    Location:
    Brisbane
    I really like Kogan, have lots of their products and massive respect for Ruslan Kogan as an entrepreneur. Always expected one day he would go public, but not sure that I would part with my $ for a piece of the IPO.

    My question is where to from here? They already now have a very broad range of products, and the whole online retailer thing which Kogan were really innovative and spearheading 10 years ago is now pretty well saturated. Also, need to question his motivations for wanting to cash out part of his business, is it to raise capital for more growth or is it to take some money off the table when the company is fully valued?
     
  3. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    1,717
    Location:
    Brisbane..
    Talked to a few other,s about this on the weekend,and some say it's expensive others will try and buy in,plus i have not read up 100% ..

    But from what was sent to me the other day they will be holding over 60% i study about new asx listings and the people who run business models like this and from experience they don't waste their time to answer critics,..

    I try and limit myself to 4-6 buy ins resells each year,the last one was a entry price a small % margin above this one,the ASX Code is BWX and as i intend to hold BWX sometimes you just have to detect the difference..
    "IMHO"..
     
  4. Hodor

    Hodor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    748
    Location:
    Homeless
    I know nothing of such things. Hopefully I'll have time to have a good read of the prospectus and see if I can learn something for the future. I won't be putting any cash towards this no matter my decision of it been a good buy or not.

    For some reason Kogan buying the online part of Dick Smith makes me uncomfortable, was this just for the IPO? Probably my basic thinking, maybe it added real value to the business.

    Anyone keen/willing to make a prediction as to where the share price will land in the shortish term?
     
    willair likes this.
  5. sanj

    sanj Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,158
    Location:
    Perth
    Their razor thin margins are scary, to be making undsr $3m ebitda on $200m or so GV while supposedly being a lean online only retailer isnt quite right, how its apparently a $150m company is beyond me
     
    Banister, Biz, willair and 4 others like this.
  6. Jerry O

    Jerry O Well-Known Member Premium Member

    Joined:
    21st Jun, 2015
    Posts:
    362
    Location:
    NSW / Melbourne
    I'm interested to hear other's thoughts on this as well.. will be following this thread.
     
    willair likes this.
  7. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,593
    Location:
    Sydney or NSW or Australia
    Compare Kogan against other listed bricks and mortar retailers - how well does it compare (P/E)?
     
    willair likes this.
  8. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    Willair you are really going to buy this? I need to be blunt and say that in my view its an utter ****bag of a business going backwards in an increasingly competitive market. Having worked with the likes of DealsDirect and OO.com.au I think the whole industry is extremely difficult, Neither of them ever made any real money despite the hype. Its hard to get effective scale (final mile delivery options are limited and really level the playing field) and you are just rebranding rubbish from Shenzhen that anyone can source = zero pricing power. Meanwhile you need to keep spending to get those eyeballs on the site....very competitive. He is a wonderful self promoter though :)

    comedy highlights below in bold. From the AFR the other day...
    .



    Online retail entrepreneur Ruslan Kogan has distanced
    Kogan.com from recent e-commerce sharemarket flops, saying the business has been in the black "from day one" despite being capital constrained.


    Mr Kogan has also defended the $15 million – or $7.5 million each – that he and co-founder David Shafer will take home from the $50 million raised through
    the company's initial public offer. He said they were reluctant to sell stock, but investors had demanded more liquidity.


    "It's different to all the others, you don't need to be a genius to work that out," Mr Kogan told Fairfax Media on Thursday after embarking on a roadshow to sell the float.


    "We have been profitable for 10 years, we have never had external equity and when sophisticated investors and very respectable long-only funds looked at this business they could clearly see we have an awesome business here with a history of strong performance."


    Mr Kogan and Mr Shafer, the chief operating officer and chief financial officer, will be entitled to sell part of their combined 69 per cent stake 14 months after the IPO, and 50 per cent two years after the float.


    However, Mr Kogan put paid to speculation that he would eventually exit the business, saying: "My name is on the door, this is my baby. I can't imagine doing anything else.


    "I want to own as big a chunk of this company as possible. We're going to have the shackles of capital constraints removed and we have significant growth ahead of us."


    Mr Kogan founded
    kogan.com in 2006 in his parents' garage, selling private-label televisions sourced directly from Chinese factories and smartphones and tablets sourced from grey markets.


    In recent years
    kogan.com has expanded into general merchandise and services such as mobile and travel. It now claims to be the largest pure-play online retailer in Australia, with 52 million visitors to its website a year and 621,300 unique customers.


    According to the prospectus,
    Kogan.com expects annual revenues to grow 20 per cent to $241 million in 2017, underpinned by growth in travel and mobile operations and expansion of its private label and third party brands.


    EBITDA is forecast to jump 138 per cent to $6.9 million in 2017 and net profits are expected to rise six-fold to $2.5 million, compared with a profit of $400,000 in 2016 and a loss of $300,000 in 2015.


    While past earnings look patchy, Mr Kogan and Mr Shafer said the company had been EBITDA positive since day one and blamed last year's loss on problems implementing a new enterprise resource management system.


    "It didn't go seamlessly," said Mr Shafer, "but we're now in a very good place and now, as part of this IPO, we have the capital to fund our growth plans, which are meticulously thought out."


    The offer of 28 million shares at $1.80 a share was four times oversubscribed, despite doubts about small-cap retailers in the wake of the collapse of Dick Smith, profit downgrades at SurfStitch and Temple & Webster and competition from rivals JB Hi-Fi, Harvey Norman and The Good Guys.


    Some fund managers said they were impressed that the company had been able to grow without external capital. Others said the offer was overpriced.


    Cyan director Dean Fergie said Kogan.com was a well-known website, but he passed because "on the financial metrics it didn't stack up".


    "The bottomline profit in 2016 is going to be less than $1 million or $2 million, so it's on a 150 times trailing PE," Mr Fergie said.



    "We think the valuation is quite excessive given the business doesn't have a great history of profitability and we think the online landscape is becoming increasingly competitive."
     
    Last edited: 13th Jun, 2016
  9. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    1,717
    Location:
    Brisbane..
    Thanks for the different views ,but i don't intend on this being a long term hold,some like this go gangbusters in the first few hours,and as the funds are in place it's only a simple phone call..
     
  10. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    Had almost forgotten about this. Kogan IPO today at 12:00. Sell side is completely stacked with little buying resistance. Stock already down 12% as IPO investors dump their stock. Ruslan crossing his fingers :)
     
  11. hash_investor

    hash_investor Well-Known Member

    Joined:
    11th Oct, 2015
    Posts:
    914
    Location:
    Sydney / Canberra
    How did it go?
     
  12. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    ****house. As expected! 15.5% below IPO price.
     
  13. hash_investor

    hash_investor Well-Known Member

    Joined:
    11th Oct, 2015
    Posts:
    914
    Location:
    Sydney / Canberra
    so Kogan made money but investors were ****ed
     
    The Falcon likes this.
  14. inspiredbyprop

    inspiredbyprop Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    159
    Location:
    Sydney
    Mr.Falcon, out of topic.

    Which platform do you usually use to do your research and trade?
    I have CommSec, ANZ and Bell. This new stock KGN doesn't seem to be appearing on the commsec but ANZ and Bell.

    For me, Commsec is my main trading platform due to better user interface and all in one with my other bank accounts.
    However, I'm in the process to move everything to ANZ due to cheaper brokerage and better margin loans. I only realised that the margin loan from Commsec is managed by Colonial hence higher interest.
     
  15. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    1,717
    Location:
    Brisbane..
    Some lucky person sold for $$2.15 ,then within ten trades it was below 2 bucks then all the way down and now sitting in the $1.50 range..
     
  16. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    Cant see it in the course of sales, showing nothing above 180cps on Commsec today, 1089 trades. What was the number?
     
  17. andrew_t

    andrew_t Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    71
    Location:
    Sydney
    Macquarie shows something similar, there were orders placed in the $2 range and as high as $2.40 but not sure they sold at that.
     
  18. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    Probably orders placed pre open never filled.
     
    andrew_t likes this.
  19. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    You had to search KGN in Commsec yesterday. My broker is Deutsche Bank, but I use Commsec for Intra day prices first, and place orders with my broker the old fashioned way, on the blower!
     
  20. Ted Varrick

    Ted Varrick Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    572
    Location:
    No Mans Land
    What a shame there's not a DOUBLE-LIKE button for a post like this.

    I would have clicked it.

    When are the punters going to start focusing on the profit margin rather than the turnover.

    Case in point:-

    Everybody ring up Ferrari and Apple tomorrow and tell them that you need a price list that you can upload to your website to sell at cost +2%.

    You will sell TRUCKLOADS with no effort.

    But the vendors wont be too pleased...
     
  21. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    1,717
    Location:
    Brisbane..
    Not sure what the trade number was,been away for a week but i will have a look and see again..
     
  22. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    No need mate