Flat Start For Nine Entertainment Co. On The Australian Stock Exchange
The shares sit at three cents below the company's listing price as investors remain wary of media stocks.
SYDNEY - Nine Entertainment Co., the parent company of the second ranked Nine television network, made its debut on the Australian Stock Exchange Friday local time, dropping three cents from its listing price of AUS$2.05 ($1.85) within the first 30 minutes of trading and sitting at $1.82 3 hours later, with 40.6 million shares or 4.2 percent of the shares on issue changing hands.
The current share price gives NEC, which also holds assets such as ticketing company Ticketek, Allphones Arena and the Mi9 online and digital group, a market valuation of $1.7 billion and will net CEO David Gygnell around $19 million in stock and salary, rewarding him for pulling the company back from the brink of receivership less than 13 months ago.
Reports here say the lower than expected listing price and the stock's debut underlines the level of demand for the stock and is unsurprising given the turmoil in the wider media sector this year.
“I was expecting Nine to maybe have a little bit more of a bounce, considering that the IPO market had been a little bit stronger this week,” IG markets strategist Evan Lucas was quoted on the Sydney Morning Herald.
“You’ve got to ask the question of how they are going to continue to generate (advertising) numbers and generate the money that they require,” he said, given that 70 percent of the group’s profits in 2014 are set to come from free to air television at a time when more and more viewers are migrating online.