McGrathmaggedon enters annals of great IPO failures

Worth noting today that McGrathmaggedon has passed through -88% today since its preposterous float:

No news since the December update but the mortgage crash is all we need to know.

Surely it is now one of the great IPO failures of Australian history. Perhaps not the Dot Bomb as yet but it’s not over either…

Comments

  1. John was going to turn ‘McGrath Goodhope’ Realty into the biggest real estate agency in the World!
    Perhaps appropriately the ‘Goodhope’ bit is long gone….

  2. Trevor Sykes as Pierpont listed ten record short lived IPOs in 2015.
    https://www.afr.com/business/banking-and-finance/investment-banking/pierpont-s-mayfly-medals-for-the-10-shortest-ipos-20150102-12hiba
    His record short lived case was this one at 25 days:
    “Rendell Industries had a solid establishment lineage. It was promoted by Australian European Finance Corp, a 51 per cent subsidiary of the Commonwealth Bank, and underwritten by the blue-blooded Melbourne broking firm of Bache Cortis & Carr.

    Rendell listed on the then second board on June 27, 1986. Trading in the stock was suspended on July 23 and a receiver appointed on August 13. Its entire life as a listed company was just 25 days, making Rendell the fastest mayfly in Australian ­history – a record Pierpont doubts will be bettered.

    Rendell was a construction company, specialising in ceilings, and had just won a contract for Canberra’s new Parliament House. But Rendell had won much of its work by cutting prices too fine and some customers were paying too slowly, so it had an expanding order book but poor cash flow.

    At the risk of oversimplifying a complex structure, Rendell’s financing was handled by AEFC, which handballed its riskier projects to a private company called Aequitas.

    Rendell was arguably insolvent when it floated. The NSW Supreme Court found that AEFC had breached its duty as a financial adviser and ordered damages totalling $2.5 million to be paid to Aequitas.

    Bache turned its files over to the NSW Corporate Affairs Commission for investigation, but the CAC did nothing. When shareholders wanted to sue Aequitas they asked the CAC for the files, only to be told the CAC had lost them.”

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