Australian Investment Blog

Medibank lists and closes below Institution issue price?

I have been fairly vocal around my opinion on the Medibank float and I feel vindicated after watching the stock close under the issue price to institutions. If there was so much excess demand in the market from professionals, where was it yesterday? Personally, I believe the government has “played” the brokers / market and sold the company at an inflated price, or fully priced at best. The brokers basically underwrote the issue, creating massive hyped up demand, enabling the settlement price to retail investors to be at exactly $2 of the so called “$1.55-$2” issue range. It feels that an enormous percentage of the bids were simply exaggerated as the huge scale back was anticipated, leaving a vacuum behind.