Vietnam tech firm Society Pass takes wild ride after historic Nasdaq listing

Hanoi

SOCIETY Pass, an e-commerce company from Vietnam, made a splash when it made its debut on the Nasdaq stock exchange in November and raised US$28 million, exceeding its original target by US$2 million.

The initial public offering (IPO) made waves as it was the first time a Vietnamese firm had completed a traditional listing on an overseas stock market.

The IPO even saw the tech firm's market value briefly cross the US$1 billion mark after the first week.

These were all very big numbers for a company that, in the 12 months to June 30, 2021, reported revenue of just US$17,000 and incurred a net loss of US$4.2 million.

But the previously little-known startup - self-billed as "Vietnam's leading data-driven loyalty platform" - continues to raise eyebrows, and it's not just because of its almost unheard-of IPO success.

Observers are also talking about some pending legal action against the company, as well as the history of its chief executive officer, Dennis Nguyen.

In an interview with The Business Times, Nguyen is nonplussed and believes that Society Pass' ambition to become the "Groupon of South-east Asia" is well on track to being realised.

At their peak, the company's shares were trading at US$51.91 per share after initially listing at US$9 each. This rapid price growth, Nguyen said, was due to a lack of other options out there.

"From April this year until now, there have been no Chinese IPOs on the Nasdaq," he said in a Zoom interview from Singapore recently. "As a result, there was - and still is - this pent-up demand for Asian stocks listing in the United States."

On Dec 17, a little over a month after its IPO debut, Society Pass' shares closed at just US$3.31 a piece. They last finished at US$15.97 last Friday (Dec 24).

Nguyen attributed the rapid decline to part of a much-wider market downturn caused by the highly infectious Omicron variant of the coronavirus.

"It's just pummelling the stock market. A number of stocks have been slammed 60 to 70 per cent in the last month. And with us being a small cap, any movement on selling of those shares leads to momentum selling, so I think that's what happened," he said.

Society Pass is less than 3 years old, but in that short lifespan the company has already amassed a handful of lawsuits against it.

One was initiated by American venture capital firm SOSV which claims to have invested in Hottab - a hospitality point-of-sale system that Society Pass says it now owns in full - in an agreement made with its former owner. SOSV is seeking damages and an equity share of Hottab.

"It's greenmail. When they found out that we were going to IPO, SOSV initiated a lawsuit in May this year but dropped it in November," said Nguyen. "Why? Because it's without merit. They knew they were going to lose and they informed us they were dropping it."

The other 2 remaining lawsuits have been brought by former employees.

"I don't want to get into that because those are ongoing, but they are employee lawsuits," Nguyen said, adding that those ex-staff were terminated because of their job performance.

Nguyen's role as the chief of Society Pass has also generated much chatter, particularly back home in Vietnam where he is well-known for raising capital for cafe and restaurant chains, The Kafe and Mon Hue, respectively.

Both companies are now defunct and have allegedly left many investors, suppliers, and employees unpaid.

"I was not the CEO of those companies. I sat on the boards and helped those companies raise money. That's the extent of my involvement, unlike Society Pass where I actually operate the company," Nguyen noted.

Despite the pending legal action and Nguyen's past experience, he insists Society Pass is taking the necessary steps to move forward.

He said that Leflair - a Vietnamese luxury e-commerce platform that Society Pass acquired and relaunched earlier this year - is experiencing massive sales growth.

There are also several other acquisitions in the pipeline that should come to fruition in early-2022, Nguyen said, without giving further details.