StarBox Group Holdings (NASDAQ: STBX) listed 5 million shares on the NASDAQ in its initial public offering on Aug 23. The STBX IPO planned to issue shares offered in the range of $4 to $5 with an implied market cap (What is Market Capitalization) of $202.5m, given the midpoint of this range.
The actual STBX IPO price debuted above this range, ending Aug 23 at $5.32, with a market cap of $239.4m. Unfortunately, Starbox Group Holdings' stock price has plummeted since then to a low of $1.37. Today it trades around $2.57, 51% below STBX stock IPO price.
STBX CEO Lee Choon Wooi said:
Stepping foot into Nasdaq makes us feel proud that we were given the chance to elevate our standing as Malaysians on a global stage,
What Does StarBox Do?
StarBox Group Holdings Ltd. operates as a holding company. Through its subsidiaries, StarBox builds cash rebates, digital advertising, and a payment solution business ecosystem. Its target market includes micro, small, and medium enterprises that lack the bandwidth to develop an in-house data management system for effective marketing.
The company connects retail merchants with individual online and offline shoppers to facilitate transactions through cash rebates offered by retail merchants. The firm also provides digital advertising services to retail merchants and payment solution services to merchants.
StarBox businesses include GETBATS, PAYBATS, and SEEBATS.
During the fiscal years ended September 30, 2021, and 2020, the GETBATS website and mobile app had 723 and 478 Merchants, respectively, and a total transaction amount of $2,501,913 and $74,867, respectively.
The company was founded on September 13, 2021, and is headquartered in Kuala Lumpur, Malaysia. StarBox Group Holdings serves customers worldwide.
Starbox Growth Plans
The company plans to selectively launch its digital advertising and cash rebate services in other countries in Southeast Asia in the next three years, beginning with markets such as the Philippines and Thailand. It also plans to further expand into Indonesia, Brunei, Singapore and other countries in Southeast Asia between July next year and June 2025.
Starbox is Malaysia’s first United States IPO this year and was the only Malaysia-based company listed on NASDAQ with foreign private issuer status.
Prime Minister’s Department Secretariat for the Advancement of Malaysian Entrepreneurs former CEO Neil Foo said Starbox had seen exponential growth during the pandemic due to an increased volume of online purchases and had perfected the online and offline business model.
With Malaysia having 1.1 million SMEs that contribute to 38 per cent of the national gross domestic product, they are our country’s economic backbone.
Starbox is the new bankable financial model for all aspiring SMEs, and they have presented themselves as the catalyst for other local SMEs to follow in their footsteps.
STBX Investment Risk Factors
A substantial majority of company revenue comes from providing digital advertising services to retail merchant advertisers. This helps drive consumer demand, increase sales, and achieve operating efficiencies. Thus, the company's relationships with its advertisers primarily depend on its ability to deliver quality advertising services at attractive volumes and prices. If advertisers are dissatisfied, they may reduce their spending or move elsewhere.
A severe or prolonged slowdown in Malaysia's economy and threats of political unrest could adversely affect the business.
Starbox's revenue primarily comes from digital advertising services on its website and apps. It must continue to retain and build member data to grow the required traffic.
Who Led the STBX IPO?
Network 1 Financial Securities, Inc. acted as the sole underwriter leading the STBX IPO.
Use of STBX IPO Proceeds
Starbox Group Holdings is using the power of technology to improve businesses of micro, small and medium enterprises and local consumers.
From the STBX IPO offering, the company expected to receive net proceeds of approximately $19,685,001 in the event the underwriters did not exercise their over-allotment option and $22,956,744 if the underwriters did choose to exercise their over-allotment option in full.
Starbox Group intends to use the net proceeds from IPO in approximately the following way:
60% to expand the business into other countries in Southeast Asia
20% for upgrading our software and systems
20% for promoting company brands in Malaysia
STBX management will have significant flexibility and discretion to apply the net proceeds of this offering in a way they see fit.
Starbox Group Stock Financial Metrics
Since its IPO, Starbox Group Stock has fallen 51%. Today it has a P/E (what is a P/E ratio?) of 79.8 and a P/BV of 91. These metrics suggest a potentially overvalued company. So far, there are no FactSet analysts covering STBX stock.
On November 3, 2022, Starbox Group Holdings, a Cayman Islands company, closed a private placement with four investors. STBX issued and sold an aggregate of nine million ordinary shares at a price of $1.40 per share and received gross proceeds, before deducting the placement agent’s fees and other related offering expenses, of $12.6m.
ASX cybersecurity stock Mobilicom also went public around the same time as the STBX IPO.
Mobilicom (NASDAQ: MOB)
Mobilicom (NASDAQ: MOB) listed on the NASDAQ on August 25. The company already lists its shares on the Australian Stock Exchange (ASX) under the symbol MOB.
MOB's prospectus states the company will issue up to 1,589,226 stock units, each consisting of one American Depositary Share (ADS) and one warrant to purchase one ADS.
What Does Mobilicom Do?
Mobilicom aims to be the end-to-end provider of the “smart solutions” that operate drones and robotics. Mobilicom Ltd of Israel, provides cybersecurity and smart solutions. The company designs, develops and delivers solutions focused primarily on targeting global drone, robotics, and autonomous system manufacturers.
The firm holds patented technology & know-how for Mobile Mesh networking. Its customers include corporates, governments, and military departments. The company was founded by Oren Elkayam and Yossi Segal in 2006 and is headquartered in Shoham, Israel.
Mobilicom serves customers worldwide.
MOB Investment Risk Factors
The company has a history of losses, and the ASX listing of Mobilicom has lost 82% since 2017.
Mobilicom expects its operating expenses to increase as the business grows, including expending substantial resources for research, development, sales and marketing.
Use of MOB IPO Proceeds
Mobilicom plans to use the net proceeds from its initial public offering to provide funding for the expansion of its sales and marketing activities, research and development, and working capital.
It believes the raise and its existing cash will be sufficient to fund its current operations for at least 12 months from the date of its IPO prospectus.