By Hannah Lynch
Shares of Trade Me, New Zealand’s biggest online auction site, first traded at $2.76 cents in their NZX debut, 2.2 percent above their price in Fairfax Media’s initial public offering of 34 percent of the business.
The shares last traded at $2.83 and 4.2 million shares changed hands in the first 10 minutes of trading.
The IPO raised a total of NZ$363.5 million from 134.6 million shares sold to investors at $2.70 apiece, including Trade Me staff under an executive share plan. Fairfax plans to use the capital to repay debt and increase dividends.
“You can call it a successful debut - investors were probably hoping to see the price over $2.80,” said Grant Williamson, director at Hamilton Hindin Greene.
“It is still early days but we are not expecting much more movement in levels than we have already seen,” he said.
Fairfax acquired Trade Me for $750 million in 2006 and it posted a A$400 million annual profit in the 2011 financial year, making the auction site a stand-out for the media company contending with dwindling advertising revenue from its traditional newspaper business.
Trade Me founder Sam Morgan is on the Fairfax Media board and David Kirk, a former Fairfax chief executive, has been named as chairman of the listed company.
However, demand for the shares was strong. Milford Asset Management's Brian Gaynor said fund managers were scaled back. See our interview with Brian Gaynor here.