I'm worried the underwriters might try to pump the stock a little over $3.50 to dangle a slight premium under the novice retail investor to induce them to buy atleast some of the shares so that the underwriters are not on the hook for the whole lot. I don't see the deal falling over. The whole point of companies paying millions to pay an investment bank to underwrite a share issue is to cover for this risk that the existing shareholders are happy to be diluted rather than give additional cash. There's a massive glut of IOOF stock at the moment which is driving the price down regardless of the long term merits of the deal.
IFL Price at posting:
$3.42 Sentiment: Hold Disclosure: Held
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