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07/11/14
16:58
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Originally posted by Katavi
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Article from Morningstar re MPL
Medibank – the farce continues
With Broker Firm allocations now made, the Medibank
Private privatisation process has descended into the
farce I suggested weeks ago. My understanding is the
average allocation is around 8%, a massive 92%
scale back. My informants tell me the allocation
ranged between 3% and 18%. Imagine bidding for
$100,000 worth of stock and being told you have
$3,000. And if you want to sell the pathetic allocation,
commission will be many percentage points. What an
absolute insult. This could see a surge in new online
brokerage accounts. As you sow, so shall you reap!
One thing is sure the demand in the primary market
will evaporate when the stock lists on the secondary
market. I understand the ‘grey’ market is $2.20. In my
opinion that would attract significant selling.
Using Melbourne Cup Day as an analogy, the
Medibank Private shares should be allocated to the
general public first, not those in the birdcage
enclosure and corporate marquees, and certainly
not to foreigners.
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Thanks for posting that.
That sounds less like a professionally written piece of research on the virtues of the IPO and more like whinge by the author for not getting the allocation sought. The government's first prerogative (and for all of us as tax payers) is or should be to ensure that it gets the most money possible for this float without compromising our national interest without misleading investors.