When it comes to investing on SGX, I'm not a fan of companies who delist only to re-list again later. Which is why I avoid their IPO, and tell you guys I have "no comment" if you were one of those who asked me about whether the IPO is worth subscribing to.
Let me use the most recent IPO of Econ Healthcare as an example.
The company was privatized in 2012, citing "low trading liquidity" as a reason, but are now back with a brand new IPO attempt again, this time with 50 million offering shares at 28 cents each earlier this month.
Unfortunately, I wasn't investing in 2012 so if any older investor here remembers how much the company was last privatized for back then, please let me know!
Watch what the media chose to report:
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| Source credits: Business Times |
Sounds like an attractive headline?
Wait till you see this:
Remember how once upon a time, IPOs used to be great for both punting and longer term investors? Recent IPOs performance such as Coinbase (30% jump) and Kuaishou (194% surge) have tempted you into the IPO play as well, and you subscribe to Econ Healthcare hoping you can similarly do a quick flip.
After all, it says it is THE largest private nursing home operator + ageing population growth trend. It should do well...right?
So you apply for $14,000 worth (50,000 shares), but end up only getting 1,400 shares i.e. $392.
Even if it rises significantly on the first few days of trading, how much profit can you make when your base is only a few hundred dollars?
I'd feel royally screwed over, if that was me.
Regular readers should know by now that when an IPO interests me enough, I tend to do a deep-dive analysis on this blog and publish it. But you didn't hear anything from me on this one, did you?
Let me just end off with this...
Source Credits: The Straits Times
Don't just read the media headlines, guys. You'll be making snap judgments when you do, and we all know how that usually spans out in investing...
I'm definitely watching to see if there will also be "low trading liquidity" this time round, and am curious what the company will do next if so.
If you need some popcorn, you can buy some at your nearest Fairprice and join me.
With love,
Budget Babe