Jump to content

Initial Public Offerings


Dsou

Recommended Posts

Hi Dsou

voila! https://www.ig.com/uk/investments/share-dealing/ipos

 

although there is a lot of evidence that buying in the primary market is not always the wisest idea. Great if you want to get in early on a specific stock but otherwise you can always buy on the first day of trading on the secondary market, eg FOOT recently IPO'd and you can pretty much still buy those at the price they IPO. Additionally, you may not get a full allocation on the IPO - this notably happened at RMG which led to scaled down allocations largely because of the widespread publicity. Again, this last week almost sunk to IPO levels.

rmg.jpeg

If you wait you can allow the market to determine the fair price (look at Snap chat - below)

snap.jpeg

and unless you are adept at reading listing Prospectuses then buying into IPO can be risky.

 

How does that help?

Link to comment

Here is an example of a recent IPO that has gone horribly wrong, and resulted in a lot of pain for shareholders. These are weekly bars from the date of listing (June 16) til now.

a.JPG

Look how the badly things have gone here. The shares were actually suspended during October this year, because the company got into severe financial distress, and in this situation shares cannot be bought or sold - your money is, for all intents and purposes, 'locked up'.


The advantage of hindsight here, and of waiting, is that we are able to assess the investment not on the initial IPO prospectus but on the subsequent results announcements that are issued to the LSE. In this case 18 months after listing on the junior market a series of cost increases, pressured margins and amounting debt resulted in a  catastrophic collapse in the share price.

An IPO prospectus will paint a company in the best possible light, it will no doubt will sound attractive, and of course any investor would want to get in at the bottom rung of the ladder of any potential super stock, but patience is a virtue and as demonstrated here, the truth will out eventually.


Regards

Rimmy

 

 

Link to comment

Thanks James,

 

Quick thoughts on this. Sabre appears to be an insurance company that is going public, selling motor insurance, having about 325,000 active policies at present, 150 employees, 86% of revenues are derived from motor underwriting policies, the remainder from associated activities.

Key points:

ordinary shares:

250m (250,000,000) 

Profits pre tax:

2016 £63.4m

2017 £44.2m ( ytd 9mth )

Pro rata'd in a linear fashion equates at 2017 F/Y £58.9m

Co intends to pay a dividend, subject to sufficient free cashflow, from June 2018

 

Expected date of admission, 22nd December 2017

 

Sales, most recent:

2016 £191.2m

 

Assets in 2016 as £511.2m - a lot of this amounts to intangibles and stripping this out reduces assets to £353.58m, which is a more realistic figure.

 

Company is looking to flat with an IPO value c£213m of which £206m will be used to exchange the Topco Preference shares (£206m) - it is worth noting these shares are 99.9% held by certain Mssrs Bell and Morris. So I read this as the owners are floating and will be foregoing a significant stake in Sabre. Upon floating the directors above will be rewarded £12m in shares, so will remain invested to some extent.

 

Any other views welcomed. On this one I don't have enough cash handy, so probably won't be subscribing. Good luck to all those who do!

 

Link to comment

Archived

This topic is now archived and is closed to further replies.

  • General Statistics

    • Total Topics
      21,279
    • Total Posts
      90,908
    • Total Members
      41,391
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    H3ct0r2003
    Joined 06/02/23 18:40
  • Posts

    • Look Ahead to 07/02/23: RBA; GB Retail Sales; BP, BNPP earnings Australia’s central bank is likely to deliver a fourth consecutive quarter-point interest rate hike, after further tightening by the Fed, the ECB and the BoE. Brace for UK retail, earnings from BP (BP) and BNP Paribas (BNPP). Also, look out for US trade balance figures and Halifax house price data ahead of key UK growth data out later in the week.    Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Monday 06 February 2023        
    • Hi, I am practicing certain strategies in demo account. I have created few screeners but when i tried to buy or short sell different stocks shortlisted based on screener conditions, i am getting different kinds of errors. Some stocks you can buy but can't short-sell and so on. I searched in the forums and i understand different restrictions such as market cap should be so and so. Are these rules defined somewhere?  for e.g. one forum reply says market cap should be above 10 billion otherwise you will get second message in below list. However even i try to short sell a stock that has £30 billion market cap, i get the same error.  1. IG is not accepting opening trades on this market, you may only place an order to close. 2. Market you have requested is not longer available online Any suggestions on the above will be greatly appreciated. Thank you.
    • Charting the Markets - February 6, 2023 FTSE 100, DAX and S&P 500 tiptoe lower following strong US jobs report. EUR/USD and GBP/USD are topping out while EUR/GBP rallies. And gold, Brent crude, and natural gas head lower, as payrolls strengthen the dollar.                         This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
×
×
  • Create New...