Megaport shares open higher after a stellar IPO

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Shares in Megaport, a Queensland-based software networking platform are more than 5% higher this morning.

Megaport debuted on the Australian Stock Exchange yesterday, after selling 20 million new shares at $1.25. The shares hit highs of $2.40 in afternoon trading before dipping below $2.

At the $2 opening price this morning, the company had a market capitalisation of $140 million.

The company claims $200,000 in monthly revenue from the Asia Pacific, where its service connects businesses with increasingly important cloud networks.

According to its prospectus, the company is currently debt free, and operates in Australia, New Zealand, Hong Kong and Singapore.

“Megaport has created a platform which allows rapid deployment to new markets in a highly repeatable manner. This platform is currently deployed and operational in six metropolitan markets… connecting 34 major data centres including Equinix, NEXTDC and Global Switch facilities among others,” reads the prospectus.

“The Company currently employs 35 staff and operates from offices located in Brisbane, Australia and San Francisco, United States.”

The company notes that there has been an explosion in cloud service providers, with projects of 32% compound annual growth between in cloud data traffic between 2013 and 2018.

The $25 million capital raising is intended for expansion into the United States and Europe to meet demand.

“This milestone allows Megaport to accelerate our business plans, to extend the platform deeper into existing markets, and to expand into new markets, including markets within North America, Europe, and Asia,” said Denver Maddux, Megaport’s CEO.

The company, which already has a base in the United States, plans to open 32 data centres across the country. There are also plans to open 13 data centres across Europe – Amsterdam, London, Dublin and Stockholm, and 1 more in Perth.

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