17live share price: rat poison or value-buy?

Lifetime Membership On 8 December 2023, 17live Group Limited made the headline news, albeit for various reasons. The technology company made history as it was the first company to be listed in SGX through SPAC (Special Purpose Acquisition Company). However, 17live share price sank on its debut, crashing by a whopping 19%. This made 17live share price one of the worst listing performers in recent years. An SG Wealth Builder member wrote to me to seek my insights.

At the point of writing, 17live share price has suffered a torrid meltdown, falling to $1.70 from $3.88. Will the counter go south further? This is very likely possible. However, in my opinion, the past 2 weeks of trading should not reflect the market value of 17live as the initial trading price was that of Vertex Technology Acquisition Corporation (VTAC), which was listed in SGX in 2022 with an IPO price of $5.00. In view of this, investors should expect plenty of volatility ahead for 17live share price as the counter continue to undergo market adjustments in the following weeks to reflect its market value.

In fact, the performance of 17live share price mirrored that of Grab, which got listed in Nasdaq in 2021 through a US$40 billion SPAC merger with Altimeter Growth Corp. On the first day of trading, Grab share price plunged 21%. Since then, Grab share price never see daylight, crashing to the current low of US$3.15 per share. On the basis of Grab share performance, I could see similar pattern playing out for 17live share price.

To recap, 17live got listed in SGX through an RTO (Reverse Takeover) by VTAC, which was previously a SPAC. A SPAC is basically a shell company holding cash only and has no underlying business assets. Its purpose is to raise capital through IPO and then acquire businesses through mergers or RTO. Currently, the other 2 SPACs in SGX are Pegasus Asia SPAC, and Novo Tellus Alpha Acquisition (NTAA).

To be frank, it does not take a genius to figure why SGX is using SPAC as vehicles to get companies listed in the local bourse. To get listed in SGX, an applicant must fulfil the quantitative criteria (pre-tax profit of $30million for latest financial year) and profit-test. Many start-ups and technology companies would not be able to qualify for listing in SGX due to these stringent requirements. Yet, on the other spectrum, SGX is facing the perennial issue of having more delisting than listing in recent years.

Through SPAC, technology companies like 17live can avoid the IPO route and get listed in SGX without the need to meet the stringent listing requirements of SGX. In my opinion, Temasek Holdings must have a hand in influencing 17live to get listed in SGX. After all, the holy-grail for technology companies is Nasdaq. So far, I have not heard of technology companies having aspiration to get listed in SGX.

In this article, I will share my insights on the biggest risk for 17live which investors may have overlooked and the potential outlook for 17live share price in the coming year.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in 17live before. Whether 17live share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

17live share price in turbulence

My personal policy is not to invest in a company that just got listed within the first five years. This is because many of the substantial shareholders are founders or key employees of the company who would want to cash out as early as possible.

For 17live, some of the vendor shareholders are [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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