Companies to introduce shares to CSE, rather than make public offers

MarketResearch

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I saw some articles that there would be 50 + IPOs are coming in next months/years and most companies going to introduce the shares directly to the CSE and not a IPO.

Then can not we buy the shares at a fixed price as we purchase via a IPO.
Could you kindly tell us what is happening when a share directly introduce to the Market.

If I correct this happened to CDB and It came to market Rs.65 or Rs.70/=

Please give your comments on this issue..................

Please read the article regarding this at:

http://srilankastockpicks.blogspot.com/2011/02/many-companies-to-introduce-shares-to.html

Thanks.

kiri

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in this situation how can company decide the price of a share. if first day arise high demand how can allocate share for them?

Meta Trader

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there is no fixed price clown

the price will be based on supply and demand. Cool

G

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Remember friends, when they introduce shares to CSE, only the original shareholders will have the share in the CDS. For a price to establish there should be sellers as well as buyers.

So, if the existing guys don't want to sell?

Meta Trader

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G wrote:Remember friends, when they introduce shares to CSE, only the original shareholders will have the share in the CDS. For a price to establish there should be sellers as well as buyers.

So, if the existing guys don't want to sell?

there will be sellers Very Happy

bcoz at the morning these people will place a buy order at the highest level in a one account and the same party will sell at that price . Very Happy

then they relies them little by little to our retailers .....

so easy to manipulate isn't it Rolling Eyes

Last edited by Meta Trader on Sat Feb 26, 2011 8:45 pm; edited 1 time in total

MarketResearch

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It is unfair.

Specially small and medium investors are benefited from the IPOs.
At least they are getting 100 or maximum 500 shares at IPO.
Since this thing they(Also we) can not get even 100 or 500.

Rolling Eyes

kiri

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Meta Trader wrote:there is no fixed price
the price will be based on supply and demand.

theoretically ok. but practically it is confuse. when we request in different prices for some shares, company earn more than ipo situation. am i correct.
ex. A request 500X25=12500
B request 500X30=15000
same quantity but company gain extra 2500 from A scratch

xmart

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bad practice!!!
they can manipulate shares. new shares will come without fresh money. so, it heavily affect to the market. if this is gonna be happen i quit from market for while.

MarketResearch

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Friends,

Please find more about this thing and please update us.

Thanks.

Monster

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xmart wrote:bad practice!!!
they can manipulate shares. new shares will come without fresh money. so, it heavily affect to the market. if this is gonna be happen i quit from market for while.

You are correct. We have seen what happend to CDB. It went up from 60 to 160 within an hour. It was purely manipulated.

Fresher

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Going Public by way of introduction is done to allow the existing shareholders to divest from the company and to get a good value for their shares. There will be no new money raised as far as I know.

You cannot really call it unfair.

This can also be done in an IPO. only difference is that new shares are not issued.

smallville

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Meta Trader wrote:

G wrote:Remember friends, when they introduce shares to CSE, only the original shareholders will have the share in the CDS. For a price to establish there should be sellers as well as buyers.

So, if the existing guys don't want to sell?

there will be sellers bcoz at the morning these people will place a buy order at the highest level in a one account and the same party will sell at that price .
then they relies them little by little to our retailers .....

so easy to manipulate isn't it

Well said... Introduction can lead to a husband buying and wife selling kinda game.. So the share goes up and small investors carried away with it.. Only thing u can go for whatever the number of shares u want..
Unlike IPOs, i think the amt spend on IPO promotion and arrangement is low.. so small cap companies could use this..
My advice is; dont buy big number of shares on margin.. if it goes down, u'll lose much on credit and its not gonna be good..

kiri

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npp wrote:
This can also be done in an IPO. only difference is that new shares are not issued.

mmm now i can understand little. in this scenario there are no new shares current shares only. current share holders can gain profit. but new investors scratch

Fresher

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kiri wrote:

npp wrote:
This can also be done in an IPO. only difference is that new shares are not issued.

mmm now i can understand little. in this scenario there are no new shares current shares only. current share holders can gain profit. but new investors

exactly. this is done for the existing shareholders to exit from the company. it is simply creating an exit route.
A company will not go for an introduction if its shareholders don't want to exit.

tubal

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npp wrote:

kiri wrote:

npp wrote:
This can also be done in an IPO. only difference is that new shares are not issued.

mmm now i can understand little. in this scenario there are no new shares current shares only. current share holders can gain profit. but new investors

exactly. this is done for the existing shareholders to exit from the company. it is simply creating an exit route.
A company will not go for an introduction if its shareholders don't want to exit.

yep, and when one reads through the prospectus of a few companies that were listed last year they were simply nothing more than creating an exit route for the founders. Yes I am talking about IPOs and not introductions. Not only did the retailers swallow them lock, stock and barrel, they piled into it in the secondary market also. They were heavily hawked at investnow and some are still hawking them here.

DK

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I tend to agree with npp, I don't see the problem. As in I don't see why this is any different to a normal trade. How do you decide to buy any other share?

If your buying is triggered by speculation (not to say that it is bad), then I agree, an introduction of shares introduces more variables. Usually we have seen that after an IPO everyone will want to buy and the share price will go up.

If your buying is based on fundamentals, then you exactly know what your price is going to be and what you have valued the share to be.

san1985

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smallville wrote:
i think the amt spend on IPO promotion and arrangement is low.. so small cap companies could use this..

i guess it is not that low and this is the most significant part...Somebody correct me if im wrong

econ

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companies go for introduction because they have to spend lot of money on IPO. to issue a IPO you need lot of money. you have to hire investment bank,secretaries ,lawyers etc. . but introduction is not that expensive .
so if company does not need any new capital better way is list as a introduction.

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Companies to introduce shares to CSE, rather than make public offers

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