Looking inside the Medibank float (25/11/2014)
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INVEST WITH MONTGOMERY
Charlie Dalziell
:
Apart from the allocation gaming, could you justify MPL on a fundamental valuation basis at $2.15?
My mail is that all domestic instos that bid were happy with their allocations.
I’m old enough to remember the hype around the AMP float, and there are many parallels. That thing has only gone down in a relative sense since 1998.
Good luck anyway.
Roger Montgomery
:
As a relatively small position, we are happy too. As you were there Charlie, you’d have to remember that the initial day’s trading in AMP was a complete screwup with an initial print that did not reflect reality and it is also worth remembering that in 1998, when it was demutualised AMP had one of Australia’s largest shareholder registers because all policy holders received shares in the new company. Willing and unwilling shareholders were given the ability to cash out. The AMP demutualisation, put hundreds of thousands of ordinary Australians in the position of taking a windfall profit out of their shares. In Medibank’s case, each shareholder is a willing shareholder having bid into the IPO. And in the first six months of 1999 AMP lost three hundred and ninety-eight million dollars after tax, most of it as a result of a half-billion dollar write-down in the value of its takeover, GIO Australia.