Market sizes up Mega

The Mega team at the launch of Kim Dotcom's new file-sharing service at his Coatesville mansion on Sunday. Photo / Richard Robinson

New Dotcom data-sharing firm will decide in 18 months to two years whether to float

Sharemarket players say a listing of Kim Dotcom's new data-sharing company Mega could have appeal for Kiwi investors but it would need a "blue-chip board" and a resolution of any court action before it could proceed.

Dotcom, who is facing extradition to the United States for copyright violation and associated charges for his previous business Megaupload, announced plans to list his new company at its launch on Sunday.

Chief operating officer Brian Clarkson said the company would decide in 18 months to two years whether to float the business on the NZX depending on how it progressed.

"It's talk at this stage - we will make a decision as we go forward."

Clarkson said it would be an opportunity for New Zealanders to invest in a New Zealand company.

Rod Drury, chief executive of listed technology company Xero and a director of the NZX, tweeted the news when it was announced on Sunday but yesterday declined to talk further about Mega's potential.

Drury said it took a long time to take a company public and the announcement was just PR at this stage.

The NZX does not have a character test as part of its listing rules for directors or promoters but it can turn down a listing if the directors have a "history of unsavoury practices".

Clarkson said he did not believe Mega would have any difficulties meeting any listing requirements.

But one fund management source said Dotcom would have to work through the legal issues before any listing would be palatable to investors. "If he won the court case against the US Government that could go well in his favour."

An investment banking source said it was hard to know what the market sentiment would be. "It would need to have a blue-chip board and governance structure ... for people to feel comfortable."

Another source said it was difficult to know what Mega's financial prospects were and those were what should drive a listing.

Market commentator Arthur Lim said given the successes with companies such as Xero and Diligent there was bound to be interest.

"The issue really is one of whether the Kim Dotcom persona - he's certainly in the public perception more popular than the Prime Minister at the moment - whether it extends ... into the sharemarket. I think it would."

Lim said Dotcom had not become super-wealthy without also being a good businessman. "Listing on the stock exchange would certainly give it [Mega] credentials in terms of the regulatory framework that applies."

Mega Ltd

• Chief executive: New Zealander Tony Lentino

• Three directors: Kim Dotcom, Mathias Ortman, Tony Lentino

• Owners: Two - just under 90 per cent of Mega is owned by MD Corporate Trustee of which the sole shareholder is Mona Dotcom - Kim Dotcom's wife
• The other 10.3 per cent is owned by Instra Group Holdings of which Lentino is the director and the ultimate shareholders include the partners of Hawkes Bay law firm Sainsbury Logan and Williams.