Just when shareholders in GetSwift Limited (Australian Securities Exchange: GSW) thought their voices mattered most, the Australian government has told them to hush up and wait.
This week, an astounding 99.58% of shareholder votes were cast in favor of moving the fast-growing SaaS company’s listing from Sydney to Toronto’s NEO Exchange. The benefits were clear, given that GetSwift does the majority of its business in North America and Canada is known to be a much healthier environment for early-to-mid-stage technology companies while new issuance Down Under has dried up.
Indeed, major shareholders including Fidelity, a nearly-10% holder, have increased their stakes significantly in the weeks leading up to the vote, indicating confidence the shares will fare better on Canadian turf. The shares were slated to begin trading in Toronto on November 24.
But now, it appears that may not happen, thanks to a surprise notice from Australia’s Foreign Investment Review Board (FIRB), which said the Federal Treasurer of Australia needs more time than scheduled to give its blessing.
GetSwift, which couldn’t be reached for comment at the time of publication, said in a filing it was given notice that the Australian Government wouldn’t be able to provide a decision by the expected November 11 date. Instead, GetSwift was offered a chance to request an extension of the Government’s time period until December 11, which it said it will seek.
The trouble with the one-month extension – which may not itself be enough to get the green light from the Australian Goverment– is that it could go against Canadian listing rules. If the share relisting does not occur in a timely manner, the agreed terms of the relisting can easily be broken, effectively killing the entire arrangement.
What does that mean for Australian shareholders? In the worst case, GetSwift would delist from the exchange in Sydney, leaving shareholders with securities that have no liquid market. That would hardly be a pleasant outcome for any stakeholders involved.
That raises the question of why the Australian Government would take such an action. One possibility is that ASIC is trying to compensate for an embarrassing scandal at the highest levels of Australian Securities and Investments Commission (ASIC), which has seen its two top leaders step aside after accepting large sums to cover personal expenses.
The ASIC payments imbroglio came as the supposed watchdog has bungled an investigation into GetSwift over the last two years. Despite an apparent lack of evidence, ASIC has burned millions of dollars in taxpayer money in its crusade against GetSwift, prompting media reports that money would need to be returned to GetSwift for its own costs.
The ASIC investigation has been called “overly aggressive” by major GetSwift shareholder Charles Frischer, who was interviewed by Bloomberg. ASIC’s credibility has also been damaged in its ability to oversee Australia-listed companies, especially those that do business overseas.
The ASIC mess notwithstanding, GetSwift has continued to win clients around the world, including Heineken N.V. and Yum! Brands, Inc., along with a Florida government-backed organization created to deliver food to the needy. In turn, its revenue has surged (including 600% in the September quarter), with some analysts forecasting US$100 million of revenue in 2021 – and profitability also around the corner.
Canada itself has been looking forward to seeing GetSwift arrive. The country has made major steps toward being a major center for listed tech companies, setting a record this year with its largest tech IPO ever in Nuvei Corp.’s US$700 million deal.
If GetSwift were left in limbo, it could also be unable to tap its committed US$45 million of financing from LDA Capital, a United States based private alternative investment group. It is unclear that LDA would purchase shares while the company remains unlisted. LDA could not be reached for comment.
Of course, the worst hurt by the Australian government’s latest move may be Australia itself. It may be hard to imagine any technology company deciding to list in Australia or even have a presence there. If the Australian Government decides to leave GetSwift in limbo, the country’s reputation in the international financial community will reach new lows and potentially make any further investment in the country something that needs to be thought about long and hard .
