Tomorrow's Business Today
The flotations that flopped
Half of the companies that joined the stock market this year are trading below the float price, we read today.
I actually thought it was even worse than that, but half is bad enough.
The FT says this raises questions “about the valuations pinned to companies by large investors….and leading underwriters including Goldman Sachs and Morgan Stanley”.
Well, it certainly should, but the big investment banks routinely get away with this stuff. Investors don’t seem to hold them to account, even if newspapers have the odd try.
Don’t the float flops raise questions for the PR trade too?
The PR firms behind the under-water floats might say that they just did the best for their clients, that they can’t control the stock market and that you are hardly likely to win business by telling CEOs their companies just aren’t worth that much.
All true, and we can have some sympathy.
But they ought not to off so lightly.
Pumping up a stock for a float and then disappearing shortly after doesn’t smack of the sound strategic advice the higher ends of the PR trade like to think it specialises in.
It’s just the usual City short-termism which gives finance a bad name and makes millions less likely to buy shares, which in the longer run ought to cost everyone money.
Perhaps there should be a league table for PR firms on floppy floats, if only so we’d know to avoid the stocks the next time they are pitching us a float story.
Perhaps the PR firms on a float should only take payment in the shares of the floating company.
That you are laughing at the very idea surely says something.
Press release of the day
People have been bullied and even fired for vaping says this from E-Cigarette Direct.
That’s weeks after the government said patients could be prescribed e-cigarettes on the NHS.
Perhaps vapers should be allowed to WFH, for ever.