Freelancer all set to soar
Freelancer. com a small technology company which listed on the Australian stock exchange on Friday has all the required tools to join the elite club of companies with a market capitalisation in excess of $1 billion. It could one day well be ranked among the country’s top 100 companies. Its current profit is only about $500,000 a year.
This morning after it had listed at 50 cents, its shares soared to as high as $2.60.
At 2:50pm (AEDT), they were trading 252 per cent higher at $1.76, giving the company a market value of about $771 million.
There are various reason why Freelancer could follow the footsteps of other successful global technology companies. Firstly it was possible for its market-leading position. In a span of four years it has become the leader in its field of online freelancing, outsourced services and crowd sourcing marketplaces.
The secret of success for any technology company is behind being the dominant provider of services in whatever is the chosen field of expertise.
Its business model involves users posting projects on its network of websites. It creates fees, by way of commission, when projects are honoured by posters and subsequently accepted by users undertaking the projects.
Freelancer raised $15 million through the offering of 30 million shares.
Roger Montgomery, Fund manager of the company mentioned, "There are some very high profile early investors in companies like Twitter and Facebook have taken a stake in Freelancer, and so everybody is riding on their coat tails," "In the long run, it's a very simple fact that the prices of the stock will be determined by its intrinsic value."
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