Medibank Private IPO: chips to a seagull

Posted: November 21, 2014 in Uncategorized

Now the frenzy for Medibank Private really starts.

The Government even raised the offer to $2 to $2.30 with an assured profit for the average investor!

This will be marketed as a great success for the Government (cashing in over AUD $6 billion for the Australian Budget) and for the retail investor.

What nobody is telling you is that, at current levels, each investor will be given approximately 10% to 20% of  what requested. So the typical request of $20,000 will give you just $2,000 to $4,000 of stock.

And if the new price is the real one, it means that the price will be 24 times the forecasted profits by Medibank for  June 2015.

It is very hard to see any upside to that….but a lot downside.

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