- Business-to-business furniture platform sees stock spike
- Market value tops $1.9 billion after investors piled in
- Rare Asian company to navigate US/China regulator crackdown
GigaCloud Technology (GCT:NASDAQ) has set a blistering pace after joining the US tech-heavy Nasdaq index last week (18 August). Having priced its IPO (initial public offering) at $12.25, the stock closed at $48.01 on Friday (19 August), 292% higher.
That’s surprising in itself, but there are a couple of reasons why the market’s reaction will leave many observers gobsmacked.
Before we get to those, GigaCloud is a Hong Kong-based online business-to-business marketplace platform for large parcel merchandise, mainly furniture. It’s backed by near-$700 billion e-commerce giant JD.com.
WRIGGLED THROUGH US RULES
GigaCloud is one of a dwindling number of small Far East-based businesses still able to tap US investment capital in spite of a crackdown from regulators in Washington and Beijing. The company has already accepted that it will likely need to add a US auditor to its advisers.
Equally interesting is why investors were so willing to chase a seller of sofas and desks. Sure, there are advantages of being online-only - no expensive stores to run, a potentially smaller workforce, high margin payments, for example - but why that might make GigaCloud so compelling an investment is a surprise.
Companies like DFS (DFS) or AO World (AO.) appear to be quite similar, and neither has covered itself in share price glory, down 45% and 65% over five years respectively.
GigaCloud looks like a company worth keeping an eye on, even if only out of interest.
