i am a fellow retail holder who got stuck holding bag on estia. All retail holders suffered instant massive losses from which i see is mismanagement of the whole ipo process by UBS.
key points-
1. Estia pre-demand IPO was seen as strong @ $5.75 in the week 24-28nov 2014. $625m cornerstone was highlighted(out of a $725m raising).
2. Japara started a massive downtrend from $2.60 in the week 24-28nov 2014. Insiders already knew about the leaked payroll well in advance. Regis share price was unaffected.
3. JHC japara announced shocking payroll ann on 2nd December. Large volumes came out 1st december suggesting insider knowledge.
4. Other negative press re aged care on 2nd december, mainly concerning challenger annuity tax ruling impact(seen to be negligible). Knock on effect on REG and JHC seen, REG from $4.20s to $3.90, JHC to $1.90s
5. Estia Bookbuild occurred on tuesday and wednesday. Most of the above Share prices impact was known on wednesday - final day of the bookbuild. Reports indicate the bookbuild was very weak, far weaker than the pre-demand IPO @ $5.75. This is not surprising considering REG and JHC, established listed peers have dropped 30% and 15% respectively.
6. UBS then knowingly proceeded with a weakly covered ipo at the original price of $5.75. Rather than cut the price and ensure a good after market. They should have known better, that a weakly covered ipo can end in disaster.
7. EHE price crashes on debut - down ~17% for holders on day 1. Just 2 days after setting or keeping the price at $5.75.
In conclusion UBS credibility is ruined. Can't fault brokers. The other JLM's should also be faulted, and should have suggested a better outcome to UBS.
A bookbuild occurring only 2 days before the list date, and they can't get a price to suit all stakeholders. A price that is fair and will ensure a solid after market? 2 days advance notice was enough to accurately assess the problem, and cut the price accordingly. esp as weak demand was known at the time.
I will complain re the above ipo, and a possible class action is in order as its approx $200m wipeout for lots of retail and insto holders.
EHE Price at posting:
$4.74 Sentiment: Hold Disclosure: Held
