LiveTiles is set to delist from the Australian Securities Exchange (ASX), citing underperformance of share prices and low trading liquidity levels, among other reasons.
In a statement posted to the ASX, the software vendor claimed the trading prices of its shares in recent years has not been reflective of a fair value and is lower when compared to unlisted companies similar in nature to LiveTiles.
This, it continued, is impacting other facets of the business. As an example, it claimed if it decided to pursue future capital raising opportunities, it would “likely impose a higher dilutionary cost on non-participating shareholders than if the company was more fairly valued”.
In addition, it also claimed that by being unlisted, it can attract a wider range of investors, including those that cannot invest in ASX-listed companies due to investment mandates.
The illiquidity of its shares has resulted in high volatility in the company’s share price, which has limited its ability to secure broad institutional ownership and has the potential to affect capital markets transactions.
LiveTiles also claimed that the company’s volatile share price is preventing it from hiring “high quality” employees, with delisting potentially improving its standings as a “more attractive employer”.
Additionally, its opportunities for value-enhancing strategies are expected to benefit from becoming unlisted. In particular current product strategy is expected to be negatively impacted while also juggling “the pressure of quarterly financial reporting cycles”, which it claimed may lead to furthered share price volatility.
“The company believes that the ongoing administrative, compliance and direct costs associated with the company’s ASX listing are disproportionate to the benefits of remaining listed,” LiveTiles added.
A general meeting to approve the delisting is to take place on 5 September. If approved, it is expected that the suspension date would be 6 October, with the delisting taking place a day later.
The company originally listed on the ASX in 2015 through a reverse takeover after it was acquired by mining company Modun.
Under the deal, which saw LiveTiles valued at $33.75 million, Modun renamed itself to LiveTiles Limited and undertook an equity offering to raise a minimum of $9 million for growth capital for sales, marketing and development activities.