Online second-hand gadget vendor MusicMagpie is the latest in a flurry of tech-based companies in the UK to go public. The eCommerce platform debuted on London’s junior AIM market on Thursday 22 April. We take a look at whether and how you can buy shares in MusicMagpie.
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What is MusicMagpie?
Founded in Stockport in 2007 by Steve Oliver and Walter Gleeson, MusicMagpie is an online business that specialises in reselling second hand-gadgets, including smartphones, video game consoles, CDs and DVDs.
The company bulk buys these items from users, refurbishes them and then sells them at a profit.
The Covid-19 pandemic has increased the fortunes of the company as consumers seek to raise much-needed extra cash during these difficult economic times by decluttering.
The company operates not just in the UK but also in the US under the brand ‘Decluttr’.
MusicMagpie listing: what do I need to know?
MusicMagpie is one of many tech-based companies that have listed in London’s equity markets recently.
Others that have floated this year include Deliveroo, Trustpilot and Moonpig. Darktrace is also planning to list in London soon.
On Thursday 22 April, MusicMagpie floated its shares on London’s AIM market at 193p per share. This gave the company a valuation of £208 million.
Shares rose to 202p in early trading but have since dropped a little. At the time of writing, shares are trading at around 198p.
The company’s listing netted £95 million for its selling shareholders. These include its two co-founders who sold some of their stake for a combined £22.1 million. The flotation also helped the company raise around £15 million in new funds.
MusicMagie, unlike a few other companies that have recently gone public, is profitable. According to its 2020 financial statements, the company made £13.9 million in profit on revenues of £153 million.
The company also received the LSE’s Green Economy Mark. This mark recognises companies that derive 50% or more of their total annual revenue from products or services that contribute to the global ‘Green Economy’.
Can I buy MusicMagpie shares?
You can buy MusicMagpie shares using a share dealing account. Simply log in to your account, search for the company either by its name or ticker symbol (MMAG), choose your position and then place your order.
If you don’t have a share dealing account already, we’ve compiled a list of some of the top providers of share dealing accounts in the UK to help you narrow down your choices.
You can also buy MusicMagpie shares through a stocks and shares ISA. This is a tax-efficient vehicle that protects any gains on your investment from the taxman.
To help you make a good choice, we’ve reviewed and ranked some of the UK’s top stocks and shares ISAs.
Keep in mind that tax rules can change in future and their effect on you will depend on your individual circumstances.
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Should I buy MusicMagpie shares?
There are several things to like about MusicMagpie from an investment perspective.
First, it’s a growing business that currently has a lot of momentum. Its commendable, albeit modest, stock market debut is perhaps a reflection of investors’ belief in the future of the company.
Furthermore, the company is geographically diverse, with a presence in the United States (under the Decluttr brand).
The fact that the company is currently profitable also sets it apart from other recent debutants in the London market.
Finally, the official recognition of the company’s environmental credentials by the LSE may make it a popular choice in a world where investors are increasingly concerned about environmental sustainability.
However, one major concern for the company is intense competition from industry giants such as eBay and Amazon, as well as local resellers such as WeBuyBooks, Ziffit, GameXchange and CeX.
Conclusively, whether or not to invest in MusicMagpie is a personal decision. Be sure to research carefully and weigh up how the investment fits with your personal investment strategy.
