There have been dozens of reverse takeovers on the Australian stock market in the past 12 months but it’s a trend which isn’t supported by some of the country’s most influential investors.
StartupAUS founding member and Shark Tank judge Steve Baxter told Business Insider while the ASX is a “fantastic place to raise capital… it has a realistic set of fees to list and it has a fantastic set of rules which protect shareholders” but the increasing number of back door listings isn’t a good thing.
“I don’t tend to like them,” he said. “I think it’s easier and cheaper to do a clean listing.”
Baxter said the potential for tech companies to take advantage of listing on the ASX cleanly, raise money and expand is huge especially with investment flowing away from the mining sector’s juniors and explorers.
“I think the ASX could be the technical small stage funding board for the world,” he said, adding Australia is a market where explorers could raise millions to launch explorative drilling exercises in the faint hope the ground below held commercially viable commodities.
“Then they’ve got to go and raise a billion dollars for the mine. And people complain about tech startups being risky? Tech startups are gold,” Baxter said.
“You can all of a sudden have that explosive growth without the billion dollar requirement.”
As for reverse takeovers, Baxter said he tends to avoid them.
“I take the perspective of if I’m going to put them on the stock exchange my dad could buy a share, in fact if I’m involved my dad probably would by a bloody share – he’s very proud, I want it to be good value,” he said.