Friday, 10 October 2014

MOL Global down 35% at IPO

MOL Global among worst-performing IPOs ever

Malaysian e-payment company MOL Global produced one of the weakest US IPO debuts of all time, declining as much as 35% in its initial session even after reducing the size of the deal by as much as 40% and pricing the offering at the bottom end of the marketing range.

“If you are concerned about slowing growth in China what do you think is going to happen across the rest of Southeast Asia,” said one hedge fund source that participated in the deal.

“It was a case of first in, first out (in the aftermarket),” he said.

If MOL Global closes the session at current prices it would rank as one of the worst first-day performances on record for a US IPO.

One source close to the deal expressed concern that the company had an inflated view of its value in the wake of the highly successful Alibaba IPO, while a buyside source expressed concern that the book was low quality, including many orders from short-term focused investors.

MOL was targeting valuations of as high as 40-times 2015 earnings, deal sources said. That is far above above the 27.6- and 26.2-times multiples of Asian e-commerce companies Tencent and Baidu.

Above text is taken from IFRasia's website. MOL Global ended the day 35% below its IPO price.

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