doing an about turn

interesting to see the media that has helped fuel this hype and frenzy has now done an about turn and decidedly become downbeat about tatts short term prospects

this is from the australian today, and the australian's tipsheet section "criterion" is also negative on tts with an AVOID rating at $3.34, saying price should come down as hype fades

personally don't agree with one analyst's target of $3 being fair value, i thin $3.20 is more like it but either way still a way to go!

Tatts' shares come on down after hype
AAP, Bloomberg
July 09, 2005
TATTERSALL'S may see its share price fall back further as the hype surrounding the company's impressive debut on the Australian Stock Exchange dies down.

Tattersall's shares closed 12c lower at $3.34 yesterday on a volume of 38.5 million.

Tattersall's shares finished their first day of trading on Thursday at $3.46 after opening at $3.50, with a massive 126 million shares changing hands.

CommSec analyst Graeme Woodbridge expects Tattersall's to fall back as the huge interest surrounding the stock before its trading launch subsides.

"Given the hype around the stock in the lead-up to the float it wasn't surprising it listed above the institutional price at $3.10 and the retail price at $2.90," Mr Woodbridge said. "We think the long-term value for the stock is about $3."

Mr Woodbridge said he expected there would continue to be significant trading in Tattersall's in the near term because there were many investors with small holdings who wanted to build it up or sell.

Tatts' listing was the biggest of the year, and with an initial market capitalisation of $2.42 billion, the stock is among Australia's top 100 listed companies.

Retail and institutional investors had expressed disappointment that only 105 million of Tattersall's total 700 million shares were available for them to purchase in the float.

The rest went to beneficiaries of Tattersall's founder George Adams and to staff.

Tolhurst Noall broker Marcus Padley said in a newsletter to clients that institutional investors had avoided jumping into the trading on Thursday and the top five brokers buying the stock were retail brokers.

"Institutions appear to have taken the view that the stock is trading above fundamental value and that until it looks cheap or until it goes into the indices and they are forced to buy it, they'll bide their time," he said.

Mr Padley said Tattersall's was trading at a 38 per cent premium to its bigger listed rival, Tabcorp Holdings, due to liquidity and Tattersall's possibly conservative earnings forecasts.

The gambling giant could use the $300 million raised in the float to expand, reducing its reliance on lotteries and poker machines for most of its income.

Its monopoly licence to run lotteries in Victoria is up for renewal in 2007 and its permit to operate poker machines expires in 2012. The state Government has said it may open the licences to other bidders.

"We will be looking at some diversification of our business to ensure that the licences are a lesser part of our total," chief executive Duncan Fischer said.

The company hopes opening its finances to public scrutiny will help it retain the licences. The poker machine business, which makes up 90 per cent of earnings, is worth $1.9 billion to Tattersall's, according to Larry Gandler, an analyst at Credit Suisse First Boston in Sydney.