Overpaying for hope and the Medibank IPO

Everyone loves to make a quick buck and investors in Medibank Private (ASX: MPL) got their chance yesterday. The company ended its first day of trading on the ASX at $2.14 per share – a 7% premium to the $2.00 paid by the stampede of retail investors who subscribed to the offer, raising $5.7bn for the Government in the biggest privitisation since Telstra (ASX: TLS). Stag profits look easy, especially in hindsight. But as with any over-hyped IPO of a well-known brand, the profits to be had are based more on hope than valuation. That’s no way to invest for...

Everyone loves to make a quick buck and investors in Medibank Private (ASX: MPL) got their chance yesterday. The company ended its first day of trading on the ASX at $2.14 per share – a 7% premium to the $2.00 paid by the stampede of retail investors who subscribed to the offer, raising $5.7bn for the Government in the biggest privitisation since Telstra (ASX: TLS).

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