Ecoya

[Anna Naum]

So the 42 Below team wants to sell candles to the world. Any thoughts?

www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10634598

[Stranger_Danger]

It isn't a sharemarket investment, it is angel investment without any of the returns.

Same people who bought Xero and 42 Below will buy it. Might turn into a business one day, in which case buy it then.

[peat]

it shouldnt be forgotten that original public investors in 42 Below were never sufficiently rewarded for the risk they undertook.

[Dr_Who]

Call me old fashion, but why would you pay so much for a candle?

[macduffy]

Yes, it's not my idea of an attractive investment proposition.

Just a pity that the NZX can't seem to attract new IPO's of substance these days. But that a different and complex subject.

[brettdale]

If the guys behind 42below are behind it, that must be a good thing.

[Steve]

If the guys behind 42below are behind it, that must be a good thing.

That's what people were saying about Eric Watson many years ago...

[Anna Naum]

That's what people were saying about Eric Watson many years ago...

To compare 42 Below and the people who set it up with Eric is just wrong. Mr Watson and Co took other peoples money with promises of safe assured returns and then shafted them. The 42 Below guys said it would be hard but worth a shot and delivered a great return. IMHO

[percy]

I never had shares in 42below,however I was very impressed with their very clever promotions using a lot of high profile people and events.Geoff Ross certainly should not be compared with Eric Watson.I wish them well with this,and will enjoy watching from the side lines.

[Steve]

Mr Watson and Co took other peoples money with promises of safe assured returns and then shafted them

Anna, I was not refering to Hanover, but way prior to that when all the punters donated to EW for the likes of Eldercare, RMG, Pacific Retail etc...

[Anna Naum]

Anna, I was not refering to Hanover, but way prior to that when all the punters donated to EW for the likes of Eldercare, RMG, Pacific Retail etc...

OK, but I still believe that Mr Watson and Co are in a completely different arena to the guys who started 42 Below, to suggest they are similar is inaccurate IMHO

[Balance]

To compare 42 Below and the people who set it up with Eric is just wrong. Mr Watson and Co took other peoples money with promises of safe assured returns and then shafted them. The 42 Below guys said it would be hard but worth a shot and delivered a great return. IMHO

Great return?

Have you calculated what they delivered in %tage terms?

And for the risk, was it worth it?

[Steve]

OK, but I still believe that Mr Watson and Co are in a completely different arena to the guys who started 42 Below, to suggest they are similar is inaccurate IMHO

Of course Charlies would have to be considered similar to 42 Below and Ecoya...

[Anna Naum]

Of course Charlies would have to be considered similar to 42 Below and Ecoya...

Why? I was not aware of any 42 Below guys being involved in CHA

[Steve]

Why? I was not aware of any 42 Below guys being involved in CHA

The whole concept of building a brand from scratch and hoping that someone will buy it out before the cash is burnt...

[Anna Naum]

The whole concept of building a brand from scratch and hoping that someone will buy it out before the cash is burnt...

42 Below had enough cash to see itself through to a +ve profit line if the takeover had not happened as I remember it, it also had good Institutional backing.

[upside_umop]

I'm along with Balance...

42 Below IPO only made 15% per annum for the original investors. The 'sucess story' that everyone refers to, is the founders raking it in with Geoff Ross coming away with $30 million or so. I jumped in 2 months prior to takeover, and in hindsight I wouldn't have. It was in my early investing days.

Anna, as far as I understand, 42 Below are still not making money for Bacardi and only last financial year still made a loss. Well, thats what I remember reading somewhere anyway.

I wont be investing in candles myself...got enough wax coming out my ears to make my own haha

[Footsie]

its jsut hard to buy a company that doesnt forcast to make a profit for 5 years.

what will the market cap on listing be?

[Dr_Who]

I actually think these guys are brilliant at marketing and branding. All the best to their success as NZ need more of these kind of guys.

To list such a early stage of a start up company usually not a good idea. This company probably belongs in the VC sector.

I still cant see myself spending $60 for a candle, but then I am not their target market.

[Balance]

Big yawn - I cannot see institutional support for this IPO.

Look at the history of 42 Below - sp dropped well below IPO price after float.

[CJ]

Look at the history of 42 Below - sp dropped well below IPO price after float.So assuming the same, that would be the time to buy and hoping that they can market it to the world like they did 42below.

The question is who would want to take them over?

I consider the Business Bakery guys more like a marketing firm than entrepreneurs - the just happen to own the company's they do the marketing for.

[Anna Naum]

NZ Herald suggesting that they may have just got to the $10m mark, which given the claim by Mr Ross that they had $5m in the bag from day 1 courtesy of ex 42 Below shareholders, suggests that (if correct) further interest, and/or Institutional interest was light.

[Balance]

NZ Herald suggesting that they may have just got to the $10m mark, which given the claim by Mr Ross that they had $5m in the bag from day 1 courtesy of ex 42 Below shareholders, suggests that (if correct) further interest, and/or Institutional interest was light.

Lots of arm-twisting and deals being done in the background to get to the $10m?

No 1 - these guys are the ultimate spin-doctors. That's good for the business they are in but for investors, it is a doubled edged sword. This time they have been on the particularly sharp end.

No 2 - there would have been a huge hoopla if they had the $10m on Wednesday. Does not take that long to count as the money comes in day by day.

I do not know of ONE person who was remotely interested.

[Anna Naum]

I was a bit worried when after not being able to get very much of other floats I was offered 'as much as you want' by two brokers in this float.

I hope Ecoya does very well, but I think the pricing is far to generous to the vendors.

[patrick]

Vendors burning the candle at both ends?

[Anna Naum]

Vendors burning the candle at both ends?

It appears so....

ECOYA IPO RAISES $10.1 MILLION

Media release closed – 1
April 30, 2010

ECOYA IPO RAISES $10.1 MILLION
Shares list on Monday

The Ecoya IPO offer has closed fully subscribed just above the target level at $10.1 million.

Ecoya Limited (NZX: ECO) is the first IPO and listing on the NZSX market in 2010. Trading in shares and warrants is expected to begin on Monday (May 3, 2010).

Applications by New Zealand institutions, international investors, the Australian and New Zealand public and former 42 Below shareholders amount to around $7.2 million which includes an additional $100,000 investment from interest’s associated with independent director Rob Fyfe.

The balance of the shares of around $2.9 million have been subscribed for by The Business Bakery LLP (The Bakery).

The Bakery, the investment vehicle of former 42 Below entrepreneurs Geoff Ross, Grant Baker and Stephen Sinclair, indicated in Ecoya’s March prospectus it would partially underwrite the offer.

Upon listing there will be 43.1 million Ecoya shares on issue and The Bakery’s shareholding will be around 65 per cent.

All The Bakery’s shares (including those subscribed for in the IPO) are subject to lock-up arrangements until release of Ecoya’s 31 March 2011 results on the terms set out in the restricted Security Deed dated 25 March 2010.

Ecoya executive chairman Geoff Ross says the additional investment by The Bakery confirms his and his colleague’s commitment to and confidence in Ecoya’s international growth plans.

“We welcome and thank all our new Ecoya shareholders. It’s the first IPO on the NZSX market in around six months. We have a spread of shareholders throughout New Zealand, and a few from Australia and selected US investors.”

“It’s exciting times as we enter significant global markets and we look forward to executing Ecoya’s international growth plan with the new funding in place.”

All investors who have subscribed for Ecoya shares are also granted two warrants for every four shares allotted. The warrants are exercisable in two equal tranches – one at any time before a final exercise date of 15 December 2011 and the other before a final exercise date of 15 June 2013.

The warrants will both trade separately on the NZSX market under the symbols “ECOWA” and “ECOWB”. The ordinary shares will trade under the symbol “ECO”.

Allotment notices are being mailed to share and warrant holders from today (Friday April 30, 2010). FASTER statements will be mailed no later than Friday, 7 May 2010.

Ends

[minimoke]

I actually think these guys are brilliant at marketing and branding. All the best to their success as NZ need more of these kind of guys.

I'm inclined to agree to an extent - their marketing was brilliant and entertaining.

However NZ doesn't need entertainment - we need companies of substance; companies which will reward investors and companies that create employement and profitable revenue. We also need innovation. Candles don't do it for me so good luck to those backing this venture.

[Balance]

Spinning away - so much for the 'big' interest.

As for the extra $100,000 to take it to $10.1m so that they can declare the issue as bring 'over-subscribed' - it's pathetic!


Big interest in new float a surprise
By Kelly Gregor
4:00 AM Monday Apr 12, 2010

Geoff Ross
Several institutional investors have expressed an interest in Geoff Ross' new venture Ecoya, something he did not experience when he took his vodka label 42 Below to market.

On the back of 42 Below's success, Ross has pushed forward with his scented candle and bodycare business by taking it to market to raise capital to expand into international markets.

The target is $10 million, and already 500 former 42 Below investors have expressed an interest in Ecoya, worth an estimated $5 million, Ross said.

He credits 42 Below's international success and its sale to alcohol giant Bacardi in 2006 for the former shareholders' interest and support in Ecoya.

Investors have two more weeks to buy shares before the listing closes.

If the capital raising works it would be the first successful IPO (initial public offering) since Kathmandu listed six months ago.

Ecoya is going to rely heavily on its environmental accolades to sell its products to international markets, especially in the United States where New Zealand's clean green image is seen as a valuable commodity, Ross says.


"So far the listing is going very well. We are very confident the way the offer is going. We expect to be fully subscribed or oversubscribed within the next two weeks."

In early March, Ecoya wrote to former 42 Below shareholders about the company's pending IPO and offered them an opportunity to register their interest.

Ross, who is executive chairman, said Ecoya's directors had expected a fair amount of feedback from the former shareholders but did not expect the extent of their response.

"I did not expect it quite to that level, $5 million is a big chunk of our overall target."

A pool of $1.5 million of shares is available for public investors, while a pool of $2.5 million of shares has been set aside for independent directors and private investors.

Of that pool, The Business Bakery, which Ross runs with former 42 Below and current Ecoya directors Grant Baker and Stephen Sinclair, has underwritten $2 million of shares.

Stockbrokers Craigs Investment Partners and First NZ Capital are expected to take about $6 million of shares.

"Do the maths, it is likely the shares would be oversubscribed."

If this happens, the public pool of 1.5 million shares and oversubscription pool will be subject to scaling.

The products include a range of lotions, wax candles, soaps and body washes. They are available from Ballantynes, Smith & Caughey and gift and boutique shops such as Nest.

The company has strong plans to expand to the US East Coast and, through independent director Richard Frank, into the film and TV industry.

The offer closes on April 26.

By Kelly Gregor

[biker]

For what it's worth, here's how I see it, put simply and bluntly........

What the F do they think we ( prospective investors) are!! All I can say is, the spin doctors reign supreme, and these sort of floats, we don't need. Why does burger fuel come to mind.
Have and will stay well out. Good luck to them.

[CJ]

Spinning away - so much for the 'big' interest.

As for the extra $100,000 to take it to $10.1m so that they can declare the issue as bring 'over-subscribed' - it's pathetic! Can anyone confirm that the $2.9m from the Business Bakery was due to the underwriting from them (and not a previously agreed purchase), in which case it actually closed under-subscribed and had to be underwritten.

Edit: I guess the question for this forum is at what price does this become a good buy - 70c, 50c, 20c?? how low did 42B go before it started increasing?

[Balance]

Can anyone confirm that the $2.9m from the Business Bakery was due to the underwriting from them (and not a previously agreed purchase), in which case it actually closed under-subscribed and had to be underwritten.

Edit: I guess the question for this forum is at what price does this become a good buy - 70c, 50c, 20c?? how low did 42B go before it started increasing?

Of course the IPO closed under-subscribed. The spin-doctors took 2 whole days to spun this tale.

Still, good luck to Ecoya - hope they do well. This is what the French do so well - stick a fancy label on a piece of something slightly different and sell for a big price.

[peat]

hows the listing going?
I cant see any quotes or volume on NZX yet but surely there is some turnover on the first day of listing even on such a quiet day as this ....

[whatsup]

Trading so far today at $1.00.

[CJ]

Trading so far today at $1.00.NZX website shows no trading as at 12.03. Seems pretty quiet for an ipo. I guess if you could short stocks on the NZX, it would be a bit different. (can you short stocks in NZ?)

Edit: NZX site has their sector as Media & Comms. So maybe you are just betting on their market skills rather than the manafacturing of product.

[whatsup]

NZX website shows no trading as at 12.03. Seems pretty quiet for an ipo. I guess if you could short stocks on the NZX, it would be a bit different. (can you short stocks in NZ?)

Edit: NZX site has their sector as Media & Comms. So maybe you are just betting on their market skills rather than the manafacturing of product.

11.35 100 shares traded according to D Broking.

[Balance]

11.35 100 shares traded according to D Broking.

My frank opinion - PR spin cannot stop this share from dropping to 50 cents in the next 12 months.

But the promotors are to be congratulated for giving this a shot.

[peat]

Profitability might be easier than we think ;+)
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10642497
Is that a candle - or a consignment of cocaine?
South American cartels are resorting to production methods which allow them to conceal cocaine by incorporating it in the manufacturing process of a host of innocuous products, from plastics to fertilisers.




Disclaimer
This post is pure humour based on the fact that this news item appears on the day Ecoya lists on the NZX and in no way intends to slur the company Ecoya or imply that their activities are anything but legal.

[CJ]

11.35 100 shares traded according to D Broking.

Not sure why NZX isn't showing it (Still isn't).

ASB is showing $11k of turnover with the following depth:


Buy Market Depth Sell
Buy Quantity Prices Prices Sell Quantity
4,000 96 99 6,000
10,000 95 100 8,823
40,000 90 105 10,000
2,900 83 0 0
10,000 60 0 0
10,000 45 0 0
10,000 25 0 0
86,900 24,823
Was it anyone here who put in the checky bit at 25c?

[Dr_Who]

Just had a look at their site. Nice packaging and nice product. Ecoya product looks abit like The Body Shop. Will be interesting to keep track of their progress and see how they market the product.

Great to see a NZ co having a go.

[CJ]

Great to see a NZ co having a go.Isn't it an Australian company?

I assume they listed in NZ to make the most of their previous success with 42Below rather than any real business driver. i assume no one has researched this co enough to know the answer.

[fwu005]

Isn't it an Australian company?

I assume they listed in NZ to make the most of their previous success with 42Below rather than any real business driver. i assume no one has researched this co enough to know the answer.

You can image how many people use candles and how many times /each year ? How many people drink vodaka and how many times / each week ? Vodaka success not equal to candle business will success.

The huge business difference is there.

[mr.needs]

You can image how many people use candles and how many times /each year ? How many people drink vodaka and how many times / each week ? Vodaka success not equal to candle business will success.

The huge business difference is there.

Yes, but the success in 42 Below was in their marketing. Vodka can be thought of as a commodity type product. Like you say, there is a large consumption of vodka each week. However, 42 Below successfully marketed their vodka as a premium product commanding a premium price, leveraging off the 'clean, green, pure NZ' image.

While there is a huge difference in the product, and perhaps the target market, there is still huge potential for the marketing minds behind 42 to successfully market Ecoya, again playing off the whole 'pure' image. These days everyone wants something that is natural and environmentally friendly.

I would have thought that the premium vodka market would be a tough one to crack. While the overall market is huge, it seems every 2 bit rapper wants his own luxury vodka label. Yet 42 Below successfully managed to make a name for themselves worldwide in a relatively short amount of time through somewhat controversial advertising and directed marketing.

Perhaps the premium fragrance and candle market will be easier to win over.

[minimoke]

Perhaps the premium fragrance and candle market will be easier to win over.
I can't see it - not unless the candles are infused with some opiates that encourage repeat purchases.

Where is the market for candles. Vodka can be aimed at the well heeled in the posh bars and in the liquor shops for someone looking for something special for the top shelf. It can also be aimed at the moonshine drinkers who fancy a bit of the real stuff from time to time. And lets face it - you can brew a pile of the stuff up in your garage, sqeeze in a bit of feijoa juice and flog it off. But candles and fragrances - thats quite a product range.

Candles??? Farmers and power cuts aren't going to buy them. They'll be no good for those scented oil burner things. Even as a panty dropper that trick can only played once. And how dense are their customers - what is it about a burning candle that is going to be so "amazing" - you get a lump of wax, stick a wick in it, light a match and you have light!. Simple as that really.

And they aren't even relying on NZ's clean green image. Its some Hungarian migrant family (I'm not sure why Borat comes immediatly to mind) thats going to do it for them this time around.

I get a strong whiff of Emperors New Clothes with this range and I'd much sooner settle back with a bottle of Vodka than a lump of burning wax. But then I suspect I'm not the target market.

[moimoi]

mini...i suspect the gobal market for this stuff is rather large...think "wellness" clinic's and "holistic healing" centres and the like. Suspect its also based on a similar premise as the internet, as in the long tail thing. ie: at a guess i'd say the NZ Society of Tiddlywinks players is rather small, perhaps 3 members, (for the record...i am not one of them), but the World Association of Tiddlywinkers is probably quite large. :-)

[minimoke]

mini...i suspect the gobal market for this stuff is rather large

Yup - agree with you there. But it is a market already with players - so not too dissimilar to Vodka. But I reckon the global market for grog is larger than the market for lumps of wax (even if they are flash lumps) - though I do stand to be corrected.

Regardless of those views IPO punters would have to be dissapointed. Heres a company clearly with no liquidity. Is it only $20k in trades over the first two days?

[fwu005]

Yup - agree with you there. But it is a market already with players - so not too dissimilar to Vodka. But I reckon the global market for grog is larger than the market for lumps of wax (even if they are flash lumps) - though I do stand to be corrected.

Regardless of those views IPO punters would have to be dissapointed. Heres a company clearly with no liquidity. Is it only $20k in trades over the first two days?

Don't look too promise. Good NZ companies are direct sold to overseas. Trademe sold to Aussie, Nextwindow sold to Canadian. 42 Below sold to Bacardi, etc. Just like NZ meat and fresh fruits, top quality export. Lower grade leave for nzer.

[Silverlight]

IPO investors could get an instant 4.8% dividend if they sell their warrants. 4 cents for the WB's and 0.8 cents for the WA's.

I think this IPO may be like BFW, not much subscription so zero liquidity will mean a very volatile price for first few years, you may be able to pick up some cheap around 25 cents like BFW, however, if ECO reach their profit and sales targets of doubling revenue every year for the next 5 years, this could be a good little company to watch in 18 months time.

[mr.needs]

Currently not a whole lot of demand for ECO. Massive bid/offer spread.

Offer @ 90c
Bid @ 63c

[Anna Naum]

Article on ECO in Stuff today

www.stuff.co.nz/business/3815720/Creating-olfactory-ambience-smells-like-money

[minimoke]

Article on ECO in Stuff today

www.stuff.co.nz/business/3815720/Creating-olfactory-ambience-smells-like-money
Oh dear, oh dear. Is that the best we can expect from our "business" reporters. That has to be the second laziest reporting I've seen in the last two weeks. Thats an article that best belongs in the "lifestyle" pages of some alternative therapies magazine.

[Stranger_Danger]

$40 candles?

I don't want to be a bastard saying no again, but.....

[winner69]

Oh dear, oh dear. Is that the best we can expect from our "business" reporters. That has to be the second laziest reporting I've seen in the last two weeks. Thats an article that best belongs in the "lifestyle" pages of some alternative therapies magazine.

I know you only winding people up mini but the article is a great piece of 'fundamental analysis

Why wouldn't you consider buying into a company that produces a product that hits the mark with the discerning user (prob heaps of them) / has a huge mark up and this outrageous margins or heaps to spend on marketing ....... and burns faster than most so people need to buy more

Cheers mate

[minimoke]

I know you only winding people up mini but the article is a great piece of 'fundamental analysis

Why wouldn't you consider buying into a company that produces a product that hits the mark with the discerning user (prob heaps of them) / has a huge mark up and this outrageous margins or heaps to spend on marketing ....... and burns faster than most so people need to buy more

Cheers mate
I beg to differ. At best it could be an analysis of the retailers. And I reckon the Warehouse makes more out if its candles than Lluma do. Warehouse can probably do the 100% markup on their products and get the profit on volume. At $37.90 Lluma aren't going to be doing the volume so they have to watch their markup.

As for the "Certainly some serious money is being made there" quote" - thats sure backed by detailed analysis - not.

Does it make me want to buy ECO products - no. Because I now know I can get a similar product for half the price at Living and Giving.

The free advertising for ECO has probably been undermined by the similarly free advertising for L & G so BGR might be the better buy as a result