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Looking inside the Medibank float (25/11/2014)

Looking inside the Medibank float (25/11/2014)

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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2 Comments

  1. 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.

    • 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.

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