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Montreal digital advertising company Sharethrough Inc. has postponed its initial public offering, the latest in a string of poorer-than-expected outcomes for Canadian tech companies seeking to list on the Toronto Stock Exchange.

Sharethrough last month filed to go public, setting a price range of $15 to $19 a share for a planned $75-million offering. But the company’s board decided on Thursday night to postpone it, chief executive officer Jean-François Côté told The Globe and Mail, citing the lacklustre TSX debuts of three recent Canadian technology companies.

“The market is so difficult for new IPOs,” he said, adding that the company did not face pressure from prospective investors to reduce the price or shrink the size of the deal. “We’re not in a rush. We’ll be ready to go again when the market is ready.”

In addition, he noted, the share prices of two other advertising technology companies, Magnite Inc. and AcuityAds Holdings Inc., dropped sharply this week after they posted disappointing results. “Investors are fatigued in this market,” Mr. Côté said. “When the window is not there to go in the open sea, you don’t go.”

It has been a choppy fall for new Canadian technology issues on Canada’s senior exchange: Investor relations software provider Q4 Inc., online learning software provider D2L Corp. and online automobile auction platform company E Automotive Inc. had disappointing TSX debuts in the past two weeks and were trading below their issue prices on Friday. D2L and Q4 had both cut the price and size of their deals.

That means nine of the 19 technology companies that have raised $50-million or more in TSX IPOs since the summer of 2020 are trading below the price investors paid, including four of the past six to come to market. The Globe recently reported that, on average, Canada’s crop of new technology issues has posted a negative return, compared with positive returns for the overall market.

Several new offerings that have traded down from their issue prices include companies that benefited from a shift to online communications and commerce early in the pandemic, including telemedicine providers Dialogue Health Technologies Inc. and MindBeacon Holdings Inc., and online course-hosting provider Thinkific Labs Inc.

As economies started to reopen, investors shifted to sectors poised to recover postpandemic, and away from the “COVID winners.” Stock in Shopify Inc., which shot up in 2020, has stalled in the past four months and bounced around between US$1,350 and US$1,550 on the New York Stock Exchange. That came as the Ottawa e-commerce software giant’s revenue growth rate tailed off relative to its sharp increase last year. Meanwhile, shares of Lightspeed Commerce Inc., the Montreal-based provider of point-of-sale and e-commerce software to retailers, restaurants and hospitality providers, shed more than 25 per cent of its value this week after the company, which was targeted this fall in a critical report by shortseller Spruce Point Capital Management, released a revenue forecast below investors’ expectations.

Sharethrough was created last spring in the merger of District M of Montreal and San Francisco-based Sharethrough U.S. It operates an online-advertising exchange used to buy and sell programmatic advertising – automated digital ads that appear on the internet – featured on 23,000 websites. It also manages programmatic ad campaigns for advertisers, agencies and brands. Customers include Variety, Rolling Stone, Newsweek, Los Angeles Times, The Weather Network and La Presse. Sharethrough’s two largest shareholders are the labour-sponsored Fonds de solidarité des travailleurs du Québec, and Investissement Quebec, the provincial government’s investment arm.

The combined companies’ results had bounced back from a sharp drop early in the pandemic, with programmatic revenue increasing by 84 per cent and 146 per cent in the first and second quarters of 2021, respectively, compared with a year earlier. Sharethrough forecast in its prospectus that revenue would increase by 45 per cent in the third quarter from the same period last year.

Total revenue in the six months ended June 30 was US$27.2-million, up 64 per cent over the same period a year earlier on a pro-forma basis. The company posted net income of $1.8-million in the first half, with an adjusted operating profit of US$5.6-million, or 21 per cent of revenue.

Mr. Côté said his company is “not in a rush” to go public because “we have strong growth, a strong platform, enough cash and very good investors. We’re very privileged to postpone this.”

Sharethrough’s IPO had been co-led by investment banks RBC Dominion Securities, National Bank Financial and Scotia Capital. Other underwriters included Barclays, BMO Nesbitt Burns, Canaccord Genuity, Desjardins Securities and Stifel Nicolaus Canada.

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