Will investors get with the program?
Nine Entertainment is undoubtedly the sexiest business brand to join the stock exchange lists this year, but its appeal in terms of profit growth is a different matter.
Its debut on Friday was creditable but created no new millionaires apart from the sellers and the chief executive.
The decision by Nine and its investment banking promoters to price its initial public offering at the bottom of the range was calculated and strategically clever.
But Nine needed a tailwind from the strong day on the broader equities market to give it pricing appeal. Dick Smith, which listed early this week, needed the same. They both lucked out.
Had Nine sellers been too greedy in pricing this float any higher, it would have finished the day further under the issue price of $2.05. It finished at $1.98, having been above $2 for most of the trading session.
The general investing public probably barely recognises the names OzForex or Veda. Both play in the innovation space and trade on their growth potential. Their IPO debuts delivered stag trading profits (in the case of Veda) of about 40 per cent.
Nine is a well-run company but operating in a mature free-to-air television industry. While there has been some improvement emerging in advertising spending in sections of media including television, the reality is that chief executive David Gyngell needs to sweat his assets hard to get growth.
The status quo won't do it. Nine needs to continue to lift its ratings and market share, make more money from its recent Nine Perth and Adelaide acquisitions, and beef up new sources of earnings.
It is a reasonable bet that the government will ultimately relax audience reach rules and this allows Nine to buy a regional television player like Southern Cross, Prime Media or WIN.
Gyngell is looking at bolt-on acquisitions in the broader new media space. Over the past month he has added an online news franchise partnership with The Daily Mail to Nine Entertainment's suite of brands.
It is a positive but probably won't really move the dial.
Gaining ratings share is an expensive exercise these days as the price for sports, which capture a large audience, has been bid up to unprecedented levels.
The additional risk associated with holding Nine Entertainment shares is that its two major hedge fund owners will be free to sell their stakes of about 35 per cent in total at the end of the 2014 financial year, which creates a medium-term overhang in the shares.
This gives Nine's management a year to convince the market that it has a strategy to improve the company's earnings that will be sufficient to justify hanging around.