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Myer IPO

Discussion in 'ASX Stock Chat' started by stocksontheblock, Sep 11, 2009.

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  1. stocksontheblock

    stocksontheblock

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    I have been reading about this for a little while now. Looks like with some of the figures out today they are doing well (?), and it would appear they have confirmed they are on the road to list on the market.

    For me, I think this might be a good one to get in on, yet it just depends on what the IPO offer is.

    So, to all you boffins out there that actually understand how prices are reached and why they come up with the price they do, I ask, what should I expect to be a realistic IPO amount? A ball park is fine with me, yet trying to get an understanding as to what might happen.

    I sure don’t expect it to be 20cents, yet I hope its not $5.
     
  2. Agentm

    Agentm

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    been watching the whole show from delisting- private ownership- ipo

    well run and the owners will make a killing here, and good on them.

    i view the myer ipo as very interesting and well timed myself
     
  3. prawn_86

    prawn_86 Mod: Call me Dendrobranchiata

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    Why does the price matter? :confused: It's market cap you should be looking at.
     
  4. stocksontheblock

    stocksontheblock

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    I guess to make the purchase worthwhile – number of shares; at $5 I won’t be able to get as many as if, for example it was $2.

    Maybe as you suggest – look at market cap, I might be looking at this the wrong way.

    Just to add – I see the prospectus is due out on the 28th September. So maybe I will have my answer sooner rather than later.
     
  5. The Owls

    The Owls

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    With regards a prospectus I would like to know how do I order one.
     
  6. swm79

    swm79

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    if you'd been watching this and wanted to get in you should have been in the Myer notes back in June when they were sitting at $91 (face value of $100) with a coupon interest rate of 10.19% - yeilding 14.6% at maturity (2013).... and THEN you get to convert that money into shares at a 2.5% discount when they float!
     
  7. skc

    skc Goldmember

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    Definitely looking at this the wrong way. How's number of shares got anything to do with anything?

    IMO the Myer float should not be priced at anything above where David Jones is trading in terms of PE (not the actual dollar amount!).

    Unless you believe Jen Hawko is that much better than Miranda Kerr + Megan Gale.
     
  8. jono1887

    jono1887

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    well if we were trading on their sales reps... i'd go long on Miranda Kerr + Megan Gale and short on Jen anyday :D:D
     
  9. surfziggy

    surfziggy

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    Anyone know where to pre register for the IPO? Or am I too late?
     
  10. stocksontheblock

    stocksontheblock

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    Maybe I am, however: Myer value = $2b to $2.5b. Sell min. 80%, based on value of $2.5b (easy math) they will look to raise $2b, correct? This is just an assumption, maybe they will sell less or the whole lot.

    IPO will offer min. subscription of say $2000 or possibly $5000 parcels. I would be in it for short-term gain, no long term investing. Reason: I think the IPO offer will be to close to current market value and possibly might not have the legs to go a lot further. I could be very wrong, who knows? This would also depend on how many shares they issue - so a few at a high $ value may present great long term value, issue many at a low $ value and possibly to much dilution and not much upward SP value? Is this a fair assumption?

    I see this like comparing DJS and JBH. Please note all approx. figures: DJS has over 500m shares and market cap of $2.5b, JBH 110m shares and market cap of $2.1b. JBH appears, to me, to have more movement to the upside because of this.

    That’s why the offer price matters, to me at least. I am not interested in buying a small parcel based on a high listing price, for what might not be much of a short-term gain.

    There are so many more of you who have the knowledge, so if this is complete BS and wrong, let me know please.
     
  11. skc

    skc Goldmember

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    Yes this is complete bs and wrong.

    Based on your logic, you should go buy the lowest $ value share on the ASX as they offer more up side. You should also short sell something like Berkshire Hathaway as their share is way over valued at US$100,000.

    Actually... re-reading your post you had no logic at all. Please change your signature line as it is clear that going to university has not helped you in pretending to be smart.
     
  12. stocksontheblock

    stocksontheblock

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    Based on what I said, no you wouldnt yet if you feel thats what I said then fair enough.

    Thanks for the completely useless input! Well then, come on, why is it wrong! Your the clever one, be helpful rather than simply a pain in the ***.
     
  13. skyQuake

    skyQuake

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    Only thing that matters is what PE it will be marketed at.

    Actually probably none of that even matters.

    Just buy in and sell for a stag profit.
    Or sqeeze it for a bit like like CRZ
     
  14. skc

    skc Goldmember

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    I am normally a lot more polite ... so apologies for my impatient response.

    Let's say Myer makes $100m a year and has no debt.

    Scenario 1 - Owner sells/floats 100% at PE 15, giving Myer enterprise value of $1.5B, and issues 1.5B shares at $1 each. For a parcel of $5K you get 5000 shares.

    Scenario 2 - Owner sells/floats 100% at PE 25, implying Myer enterprise value of $2.5B, and issues 25m shares at $100 each. For a parcel of $5K you get 50 shares.

    So you are saying that scenario 2 (less number of shares at higher $ value) for some reason presents great long term value?

    How can you possibly tell a share's upside by looking at the number of shares and market cap alone? What about 50m shares and cap of $1B? Or 10m/$2B?

    It all depends on how much money the company makes and at what rate those earnings would grow, does it not?

    Not only is this statement wrong, it contradicts your earlier statement that small parcel / high listing price presents better value. Or does better long term value means poorer short term gain?
     
  15. surfziggy

    surfziggy

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  16. cancan

    cancan

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    thanks for the link to pre-register. very useful :)
     
  17. SilverRanger

    SilverRanger

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    The link is probably the most useful thing in this post :)

    stocksontheblock: you seem to have misunderstand the word dilution here, it is not the $ amount of the SP that matters, what matters is how much % you earn the company.

    E.g. In a company worth 10k, owning 1 share @$1000 and owning 1000 shares @$1 equally means that you own 10% of the company.

    The long term prospect of a company mainly depends on its future earnings, which is compared with its market cap.
     
  18. aussiebbs

    aussiebbs

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    sorry i am new to IPO, anyone knows how to participate in IPO? what steps get invovled?
     
  19. Whiskers

    Whiskers It's a small world

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    To participate in an Inital Public Offering you have to get hold of a prospectus, read the details carefully and fill out the application to apply for shares.

    Geez... being a red blooded Aussie guy, I'm liking the company a bit more with Jen Hawkins on the flagstaff. ;)
     
  20. jet328

    jet328

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    There might be a bit of a stag in it, but as an investment?

    It just seems like the standard private equity model. Come in, flog off everything ie. the properties that they owned and will now be renting them back, cut costs, stock levels and staff to the bone.
    Makes the short term numbers look great. If the PE owners really thought Myer was a decent investment, why are they so keen to flog it off after just buying it?
     
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