Hong Kong
CNN Business
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Taiwan’s latest Wall Street entrant has had a rocky ride since going public a week ago.
Shares of Perfect Corp., a software company that allows users to virtually try on makeup or jewelry from brands including Estée Lauder, LVMH and Shiseido, have fallen. more than 40% of its listing price since it began trading on the New York Stock Exchange a week ago.
Perfect Corp. lends its technology to beauty and fashion brands. It uses augmented reality and artificial intelligence to help users try products online before buying.
The company’s valuation rose to about $1 billion after merging with Provident Acquisition Corp., a special purpose acquisition company (SPAC), days before its listing. Shares of the new combined business began trading last Monday under the ticker symbol “PERF” and have since fallen about 46% from the opening price of $15.80.
The broader S&P 500 Index has lost about 14% in the past five days, according to data provider Refinitiv Eikon.
SPACs are shell companies with limited or no operating assets. They typically go public solely to raise money from investors that is then used to purchase existing businesses.
Daniel Ives, managing director and senior equity analyst at Wedbush Securities, said investors might be wary of Perfect Corp. because “in a risk-free market, an augmented reality work with Taiwanese roots is a half-empty name.”
“Tech stocks have generally been weak and any additional geopolitical risk will be a concern in this market,” he told CNN Business.
Taiwan is a self-governing democratic island that Beijing’s communist leaders have long claimed as part of their territory, even though they have never ruled it. Since Russia’s invasion of Ukraine this year, some foreign investors have raised concerns about the risk that China could increase its military force against Taiwan.
Perfect Corp. said it raised approximately $119 million in the deal.
The company chose to list in the United States because much of its clientele is based there, founder and CEO Alice Chang said in an interview with CNN Business. She said that she was wearing her own “digital makeup” and virtual earrings on the video call.
Chang founded Perfect Corp. in 2015 as part of a unit in Cyberlink, a technology company in Taiwan, which was later spun off as a separate business. Cyberlink remains one of the firm’s investors, along with global brands such as Chanel, Goldman Sachs (GS) and Snap (SNAP).
Chang said the company would use the proceeds from its merger with SPAC to expand into Southeast Asia, fund research and development, and double down on new capabilities of its technology, such as allowing users to try on accessories beyond jewelry.
“We just joined the jewelry, the fashion,” he said. “This is just the beginning.”
Perfect Corp. is part of Software as a Service industry. The firm now has offices in cities around the world, including New York, Paris, Tokyo and Shanghai, serving more than 450 brands, Chang said.
It generated $40.8 million in revenue last year and is aiming for sales of more than $100 million by 2024, according to regulatory filings.
It all started with a selfie, according to Chang.
Around nine years ago, Chang frequently took photos of herself to share with friends and family, often wishing users could polish up her appearance instantly. The idea eventually led to a mobile app called YouCam, which allows users to instantly touch up their skin without looking “fake,” she said.
The question was: “How can I link the virtual beauty with the beauty of the real world?” Chang remembered. “I think if you stop [the] the user tries more, he will buy more”.
That assumption has led the company to advance its presentation to brands, even as popular consumer platforms like Instagram offer similar filtering technology.
Perfect Corp. is one of the few Taiwanese companies to list in the United States in recent years, according to Dealogic data.
His arrival comes just months after Gogoro (GGR), an Al Gore-backed Taiwanese electric scooter startup and one of Apple’s biggest suppliers, had its own day on Wall Street. The company also went public in New York this April after merging with SPAC, raising at least $335 million in cash in that time. Its shares are down 68% so far this year.
Source: news.google.com