Why you shouldn't believe everything you read about IPOs

“ASIC cracks whip on IPO hopefuls” was one recent headline in the Australian Financial Review, on the same day (April 19) that a story in another part of the newspaper carried the headline “Investors warned to be wary of overpriced floats.’’ It's more likely an accident than a conspiracy that both articles ran on the same day but they conveyed the impression that anyone who puts their money into a new float is in for a painful experience and that, moreover, the retail investor requires protection from the myriad of sharks and duds in the new issue market. As evidence of the assertion, one of the articles trotted out a list of specially selected 17 failed floats that had come on since the “window” opened in mid-2013 and of course it looked dire, headed as it was by shares in McAleese, launched by three reputable investment banks in November 2013 at $1.47 a share and last seen at 6 cents. That’s a drop of just over 96 per cent... Continue reading: (VIEW LINK)

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