PEXA listed at a $3b valuation — and went nowhere on day one

Australia's dominant online property settlement platform, moving the $300bn conveyancing industry off paper.

That its monopoly on digital property conveyancing, plus an overseas expansion, could justify a $3b valuation on $218m revenue and no profit.

Built over a decade as Australia's digital rail for property settlements, majority-held by Link Group alongside CBA and Morgan Stanley Infrastructure Partners.

PEXA pre-empted the float by reporting June-quarter transaction volumes 4% ahead of its share-sale forecast; Morningstar valued the stock at $13.20, 23% below the IPO price, and rival Sympli promised interoperability by year-end to break the monopoly.

Listed 1 July 2021: opened at $16.68, more than 2% below issue, dipped to $16.40, closed at $17.15 — two cents above the IPO price; MSIP sold its entire 40%, CBA lifted to 23.9%.

The IPO priced at the top: trade-sale interest handed sellers the leverage to take the valuation to $3bn before the market voted.

The day-one test investors actually applied — discount for execution risk — showed up as a flat close, not a collapse.

Monopoly status had a expiry date attached: Sympli's interoperability pledge gave investors a competition timeline.

The overseas expansion carrying the growth story was, per Morningstar, an unproven assumption priced as a fact.

Pricing an IPO at the ceiling leaves nothing for buyers: even a genuine monopoly floats flat when a trade-sale bid sets the number.

As of listing day, the float had raised $1.175bn, with Link netting about $180m to pay down debt. CEO Glenn King called the listing a success, pointing to the quality register. Sympli's interoperability push promised real competition from later in 2021.