14 March 2016

IPO offerings - Buyer beware!

Looking at the valuation of the Purplebrick online property agent one has to ask if investing in publicly offered shares is really a suitable investment option for the broader public. It does not take a mathematical genius to figure out that there is one certainty: the selling promoters and insiders make a hefty packet while the investors coming in at a later stage buy into a lot of hope.  I am all for 'free' markets but one has to wonder whether the regulatory and tax framework does not need a healthy dose of adjustment. Listings such as these may only be backed by 'skilled' (?) professional intermediaries, but they are ultimately investing the savings of Joe Sixpack, not their own money. The London Stock Exchange has been converted into a profit-seeking business which is a shame as it should really be in the forefront of guarding the end investor's interests above all other objectives. Talk of shareholder 'engagement' is really so much hot air if that is not the case. That one of the backers of this issue has reaped a double digit bonus in the recent past adds to the discomfort of the interested observer
 (20 December 2015)