As we all marvel at the incredible resources boom on the sharemarket, it is worth reflecting back on what happened to some of those stocks which soared during our last bubble – the 1999-2000 dotcom bonanza.
Chris Tyler’s Solution 6 and accounting software company MYOB were two prominent players which both saw their share prices plunge by almost 90% before merging in 2002-03.
After this merger, MYOB was arguably Australia’s most valuable tech stock for a couple of years ago but wasn’t even in the top 100 – a reflection on our IT failures as a nation.
MYOB today reported a full year net profit of $17.3 million on revenue of $182 million (63% of which came from Australia) and its share price is still wallowing at $1.23 – a far cry from the equivalent of $5.40 it reached at the peak of the dotcom bubble.
However, MYOB has now surrendered the IT crown with the emergence of IRESS market technology, a Melbourne-based company which develops share market information and trading systems.
IRESS shares have soared from $6.80 to $8 since late January and really should have copped a price query from its conflicted major shareholder, the ASX. IRESS is now capitalised at $877 million, almost double MYOB’s $472 million.
The biggest success story from the dotcom boom is undoubtedly Computershare, which today reported a net half year profit of $US107 million as revenue soared 18% to $694 million, only 16% of which still comes from the Australian market.
Computershare predicted a 50% leap in full year profit and its shares soared 63c to $10.43 in morning trade – surpassing the intra-day dotcom peak of $9.90 for the first time. Computershare has issued about 100 million new shares since that point, so today’s market capitalisation of $6.25 billion is a clear record.
Founder Chris Morris can feel well satisfied in blasting Telstra for dumping its 15% stake in 2000-01 at an average price $6.70 – booking a profit of $285 million. Sure, the shares tumbled to a low of just $1.50 but today Morris is personally sitting on a stake worth $582 million.
Computershare has used a proprietory technology to build a dominant position in the Australian market and then has taken this global to become the world’s biggest player in the share registry business. Well done, indeed.
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