Hi Vivo86
No one's made a profit today, only a sea of red.
All IPO's are a bit different, but in this case Bell Potter (a broking firm) have elected to underwrite IPO and pull the deal together at $1.50 per share to the tune of $70M. As part of that insto's brought the bulk, including the existing capital partner with the founders (RGT Capital) - with an additional 10M at $1.50 (15M) in addition to new insto's. Bell Potter then try and flog off shares to their customers as a special exclusive offer (the IPO was only open to Retail customers with Bell Potter). Generally they build some hype around the shares, squeeze supply, and price pops on open. Bell Potters customers make money on the first day, they collect their fee, and everyone's happy.
Thats why this is a bit odd.
Founders cant sell. Bell Potter doesn't want to be left holding the can on 70M of shares now worth 70 cents in a $1. Let alone embarrassed having promoted these to their customers. So as part of the deal founders shares are held under escrow (see below). In short they can sell for a period of time to help support the price on open. So 73% of issued capital cant be traded until post 01/07/21.
The only people that could have sold were new insto's and Retail holders with Bell Potter. But if you just paid $1.50 why sell it for less?
Has to be short sellers doing a naked short. Expect some pain in the coming weeks if that is the case. But for every share they short they have to pay a fee on (they have a time factor) and importantly they have to buy every share back at some point. Keep an eye on it, could be a good short term trade coming.
Shorters can only make money if they buy for less than the short. Assume they started at 1.32 (open) down to 1.05 in a day. So doubt they brought any today, they would only be sitting on a paper profit. With such a thinly traded stock they're taking a big risk and could get burnt when they go to buy it back.
Or I could be wrong and all the investors had a sudden change in heart and wanted to dump their shares ASAP. But highly doubt it
