His brokerage broke the golden rule of IPOs – and paid for it ever since. It’s a reminder that for every success, dozens never quite crack the big time.
Listing volumes are too volatile – a 5 or 10 per cent downturn in listings can wipe out profits, and tank a company’s share price.
The reality was much different. McGrath Limited stuffed up early, missing its prospectus forecasts in its first year on the ASX, and has paid for it since.He’s now de-listing McGrath Limited via a takeover at 60¢ a share, or less than one-third of the IPO price. It is an all-too-familiar story of life in listed markets.McGrath’s problem was that the market didn’t believe in his company anymore.
“Listed markets like steady, annuity-type predictable income. I think our company couldn’t deliver that style of income.” He says it is the same in the United States.
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