What are they using capital raised for? Well, ICQ recently...

What are they using capital raised for?

Well, ICQ recently bought Thailand’s largest automotive website, "One2car.com"; accompanied by ongoing heavy self-investments for rapid growth of the company thus ICQ reported a loss btw 6.5-7M for the first half-year. As a result, ICQ remained cash-flow negative, so they needed a way to fund that monstrous growth. Hence ICQ management decided to raise more capital.

Of course there is nothing unusual about this. As an investor I can perfectly understand and agree that there will be continuous cycle of operating losses for the healthy growth of the company. Otherwise how could one expect such a young company to dominate Asian car market.

Some investors prefer to take a punt on Carsales (CAR) rather than ICQ, for CAR is a relatively well-established company that already gives dividends with a further growth opportunity. Yes, I would do the same - if only CAR share price were around $4-5/share as it was 5-yrs ago. I think CAR has already seen the blue sky by reaching $10/share in less than 3yrs however it has been sitting there since 2013. In fact, if I had invested 100K to CAR two years ago, I would make only ~$5K in TWO years and that would come from the dividends.

Furthermore, Carsales has managed to triple its share price from $3.50 (IPO) to $10.50s in less than 6 years - we are talking about an online car advertisement company operating in Australia where ~23million people lives.

Whereas iCar Asia (ICQ) is following the footsteps of Carsales but applying this strategy in a significantly larger Asian market -and when I say significantly larger, I am talking about countries where the total population size exceeds ~360million (18x larger than OZ). According to the recent report by ICQ, the company has already achieved market-leading positions in Malaysia, Indonesia and Thailand. So don't be fooled by the low listing fees in these countries (moreover Singapore and HongKong markets are as expensive as Australia market), the market is gigantic that these small listing fees easily snowball into millions. Of course, this would only happen if ICQ can indeed monopolize these markets and protects it's position.  The good news is that ICQ has hardly any serious competitors in these underdeveloped countries.

This is why I believe that ICQ holds more potential that Carsales has ever had. I think this is the reason why Carsales is holding ~19% of ICQ shares as of 10 July 2015. All in all, I have faith in ICQ (I'd better be right ) that SP will skyrocket in the following 2-3yrs, making a hole as big as Asia in the ozone layer and rise even further - I'd expect Carsales to acquire ICQ before it all happens though...