Buyer beware: Are investors in Ryde’s IPO in for a rough ride?

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Hello reader,

The successful listing of Arm Holdings (ARM, NDAQ) may herald a thawing of the IPO market in the US. Other tech players hoping to follow in Arm’s footsteps include delivery company Instacart and marketing automation platform Klaviyo.

While the market for big IPOs may be unfreezing only now, there have been plenty of smaller IPOs in the US throughout the year, including a number of Southeast Asian tech firms.

Ohmyhome (OMH, NDAQ), a Singapore-based proptech platform, listed in March, while its peer Simpple Ltd. (SPPL, NDAQ) has just raised US$8 million. And of course, who can forget VinFast (VFS, NDAQ)? At one point, the Vietnam-founded firm became the third-biggest automaker globally by market capitalization.

However, these firms are not without their skeptics. For instance, Ohmyhome and Simpple are small companies that generated revenue worth under US$10 million in 2022.

Add Ryde, a Singapore-based tech platform in the mobility and quick commerce business, to this list. As I highlight in this week’s Big Story, its revenue in 2022 did go up by 42% compared to the previous year, but this hides a much slower 7% year-on-year growth in its mobility segment.

The company is also facing slowing gross merchandise value and transactions as well as widening losses.

Long-term fundamental investors may give these companies a wide berth for now, but that doesn’t mean that one cannot make money from trading in their shares. As with meme stocks, many of these companies’ shares offer volatility to the brave of heart.

— Simon

THE BIG STORY

Image credit: Timmy Loen

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