The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Privates on parade fail to pass muster

This might be the year of the thwarted private-equity IPO. Since January, venture capitalists have been parading their most eligible assets before investors, who so far don't seem over-impressed by what they've seen.

       

THE WELCOME GIVEN to HMV - jointly sold by record company EMI and private-equity firm Advent - when it was floated on the London Stock Exchange in late April was muted to say the least. The £537 million issue was priced at 192p from a range of 220p to 190p yet still traded down in the after market, falling 7.6% on the first day of trading to 169p on May 27.


HMV's uninspiring performance helped set a dangerous precedent. It fuelled the belief that new issues trade down in current market conditions, so creating a strong disincentive to buy in at the IPO stage. What's the point, reason investors, when you can pick up the shares much more cheaply a couple of weeks after the launch?


It didn't much help HMV's cause that just days before it priced, the Copenhagen Stock Exchange IPO of LM Glasfiber had to be pulled.



You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree