The basic reason for the failure of- the recent $2.1 billion Flat share offering was that the world’s investors simply were not interested in that amount of Fiat stock at the offering price, or anywhere near *It. Supply was far ‘in excess of demand, causing the stock’s market price to plunge.
Offered at a 4% discount from the September 23 closing price on the Milan Stock Exchange, the 8.5% block of Fiat common stock that poured into the market soon lost more than 6% of even its discounted value, as the underwriters falled to place the offering and sellers of Flat shares in Milan outnumbered buyers.
Pricing ‘is critical to the success of any international stock o ring – along with timing, preparation, distribution and market making – and it can bc a delicate affair, requiring luck as well as judgement.
Access this research
Enter your work email address to sign in or check whether your organisation already has access to Euromoney.
