Float Advice from Heathcote, NSW
Company floats are no different. By our rough reckoning, based on the companies that have floated this year, the average closing price on listing day has ended just below the issue price. But, after just a week, more than 50% had already begun to slip away.
The sellers behind floats are the companies behind it and the underwriting broker. That's why you may find your broker suddenly taking an interest in your affairs by recommending an 'exclusive float' to you. A shock isn't it? Not really, the broker's corporate finance department would be pushing the buttons to make sure all stock is sold so they can collect a nice fat commission.
Recently, Australian Magnesium was not a great success first time around. This was technically not a float but people still had prospectuses shoved under their dunny door claiming magnesium is 'surely' the next big thing to change the face of mining.
Another one to keep an eye out for is the current trumpeting of Enex Resources (big coal float). We've got a full and genuinely independent review of the next big push at www.floattank.com.au.