The share price of Skydive the Beach has dropped 14per cent on the company’s second day of trading, after two experienced skydivers were killed at one of the drop zones it plans to buy.
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The Wollongong-based company made a stellar debut when it went public on Friday morning, with shares jumping from 25¢ to 39¢ when the market closed at 4pm.
Half an hour earlier, police received reports two skydivers had hit the ground at a Byron Bay drop zone, owned by Australia Skydive, after their parachutes became tangled. Alana Clarke, 29, died at the scene, while world champion Michael Vaughan, aged in his 40s, died in hospital from his injuries on Saturday night.
On Monday afternoon, the Skydive the Beach share price closed at 33.5¢.
Company secretary Anthony Ritter issued a letter expressing ‘‘sincere condolences to all those affected by this tragedy’’, saying the company had ‘‘considered the possible commercial and financial impact of this tragic accident’’.
Skydive the Beach planned to acquire Australia Skydive and its five sites, including the Byron Bay drop zone where Ms Clarke and Mr Vaughan died, with money raised from the float.
‘‘The board has concluded that the accident is unlikely to have a material adverse financial effect on Australia Skydive or on the financial forecasts included in the [company’s stock market prospectus],’’ Mr Ritter said.
‘‘It had therefore determined to proceed towards completion of the acquisition ...’’
He noted the operations of both Skydive the Beach and Australia Skydive were mostly in tandem, not solo, skydiving.
Skydive the Beach’s initial market value was $73million when it floated on Friday, and it is forecast to double the number of dives it sells in the next year. Its market value lifted to $114million on Friday afternoon.
The company has a better than average safety record, according to the Australian Parachute Federation.
Its injury rate was one in 1688 jumps in the past three years, compared to the national average of one in 1522.
Last year, one customer, an experienced skydiver, died at Barwon Heads in Victoria after jumping alone. Investigations at the scene found neither the main nor back-up parachute had been deployed.
Company founder Anthony Boucaut told Fairfax Media this incident had no significant impact on the business.
‘‘Ironically, what happens is when there’s an incident there’s an incredible amount of media, a staggering amount of media, and we could never buy that kind of media as such,’’ he said.
He said the result was more bookings and more website traffic. The Australian Parachute Federation is investigating the fatal accident.
