Australian Securities Investments Commission and Australian Stock Exchange

Guvera: Guvera has been valued by its backers at over $1 billion, but the company is running at a heavy loss and only generated $1.2 million in revenue last financial year, according to Australian Broadcasting Corporation. Now Guvera is trying to raise another $100 million from the public. Map: Australia The Australian Securities and Investments Commission is allowing the controversial stock exchange listing of the music streaming service Guvera to go ahead, despite concerns about the company financial health. The Australian Shareholders' Association said investors are being sold a lemon, and Guvera should be barred from entering the market. "We believe that when a company lists on the Australian Stock Exchange, investors are entitled to believe it kosher," Australian Shareholders' Association director Allan Goldin said. "It a real company, and something we can go and put our money into." Guvera has already raised $180 million from 3,000, mostly self-managed superannuation funds, but last financial year the company reported a loss of $81 million. "Really the question is how could a business that has raised $180 million still be so shy on revenue even after 5 or 6 years," said Alex Pollak, chief executive of the fund management firm Loftus Peak. "What that basically says to me is there are problems with the business model itself." Despite doubters, Guvera upbeat about prospects "Guvera revenue model replicates that of major social media platforms based on mobile digital advertising," said Phil Quartararo, Guvera chairman and a former chief executive of Virgin Records. "The provision of music is a mass-market service, and I believe Guvera brand-funded business model helps position the music company to take advantage of this mobile advertising explosion." However, Guvera situation is so precarious its prospectus reveals significant doubt over whether the company could survive if it did not raise enough money from its share market listing. Guvera co-founder Darren Herft also runs an investment firm, AMMA Private Equity; it has since been revealed a number of accountants had introduced their clients to AMMA, with a view to investing in businesses like Guvera. Late on Thursday, ASIC allowed the float to proceed after insisting on changes to some prospectus numbers, but other concerns still linger. (news.financializer.com). As reported in the news.