Ocado forced to revise downwards issue price
Despite an apparent reluctance to give in to market conditions and investor demand for new issues, Internet grocer Ocado has this evening been forced to reduce its asking price to a range of £1.80 to £2.00 from an initial estimate of £2.00 to £2.75. This reduces the potential valuation for the business from around £1 billion to around £800 billion although it looks as though the offer will be successful at the reduced price.
Whether or not the company is or was worth in excess of £1 billion is open to debate but the fact is that investor sentiment for new issues has collapsed over the last few days. Indeed many people believed that Ocado would be forced to pull the issue at the last-minute but the company has managed to battle back with the assistance of US investors who have shown more appetite for the business. Whether this is a consequence of the reduced exchange rate between sterling and the dollar is a possible factor.
It will be interesting to see how the shares perform when trading begins on the London stock market and indeed whether they are able to maintain their flotation price.
Share this..
Related stories
Government left with £2.3 billion loss after shareholders snub RBS rescue
The government has today been left nursing a £2.3 billion loss after Royal Bank of Scotland shareholders snubbed their attempt at raising £15 billion and leaving the government to take up the vast majority of shares on offer. The government's holding is now 57.9% and gives its effective control of one of the U.K.'s largest commercial banks.
This is not the start to the rescue pack...
US banks still require billions of dollars in funding
Despite rumours that the US banking sector has as a whole escaped relatively unscathed from ongoing stress tests, it would appear that a number of high-profile banks will need significant capital in the short term. The American authorities have given these banks up to one month to raise the additional funding required after a constant drip feed of information to the markets. The aim of drip feedin...
Read MoreHigh court rejects move for Lehman Bros asset return
The High Court in UK has today rejected a plea by PricewaterhouseCoopers with regards to the speedy return of assets from the fallen Lehman Bros operation. Currently there are around £10 billion of customer assets held outside of the UK which the High Court today ruled fallout of the jurisdiction of UK courts. While they will be returned in due course it seems as though the UK courts have no con...
Read MoreRoyal Mail announces profit increase but all is not well
The Royal Mail has today announced half-year figures showing a rise of £7 million to profits of £184 million for the six month period. This comes despite the fact that revenue for the overall business has fallen by 1.5% and competition, as well as industrial action, is set to hit future income and future profitability. But there is more beneath the surface which needs to be addressed! It was...
Read MoreBob Diamond set to become Barclays chief executive
Bob diamond is set to become the new chief executive of Barclays Bank next year which is likely to cause more friction between the UK banking sector and the government. Bob Diamond was once described by Lord Mandelson as the unacceptable face of capitalism and has a reputed £95 million fortune which has on the whole been earned in the investment banking arena. It is believed that the future ch...
Read More