The Airtasker Ltd (ASX: ART) share price is having a terrible day today. Airtasker shares are, at the time of writing, down a hefty 10.23% to $1.19 a share. That's still a good 15% above the price the company hit the ASX boards at last Tuesday. And it's also well above the listing price of 65 cents a share that the shares were offered up at.
But it's also 39% below where Airtasker hit last Wednesday when investors sent the company up to $1.96 a share in the company's second day of trading.
So is there any good reason why Airtasker is falling today?
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Putting the Air in Airtasker shares
Well, the short answer is not really. There is no official news or announcements out of Airtasker today. In fact, its last announcement was a holding notice from investment bank Credit Suisse two days ago. While it's nice to know that Credit Suisse has enough shares to warrant 5.5% of the company's voting power, that was actually effective 24 March, and thus unlikely to be affecting the Airtasker share price this week.
No, it's more likely that we are seeing a classic 'IPO (Initial Public Offering) deflation' going on. IPOs often generate a lot of investor buzz, which the companies themselves like to encourage. Fair enough too, it's not every day a new company joins the ASX. Especially a hot new tech company like Airtasker. But investors usually have a very short attention span when it comes to these IPOs. As such, it is not at all uncommon to see a frenzy of trading when a company joins the ASX, followed by a gradual drop in trading activity when investors realise they now have until Judgement Day to invest in Airtasker, so what's the rush.
We see evidence of this in ASX trading data for Airtasker shares. The ASX tells us that 4.4 million Airtasker shares changed hands yesterday. That's a steep drop from the 55.7 million shares that were traded last Thursday.
As we pointed out last week, we have seen extreme volatility followed by deflating interest in most of the ASX's big IPOs over the past year or two. Airtasker is no different, it seems.
On the current Airtasker share price, the company has a market capitalisation of $518.6 million.
