Is a Medibank windfall yours today? 21



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Jingle bells, jingle bells… just in time for Christmas, at 12pm today, the year’s most anticipated float,  Medibank Private will hit the share market and is said likely to put a smile on anyone’s face who took a risk on it.  Did you consider Medibank Private for investment?

The shares, which sold from prospectus to retail investors for $2.00 and to institutions at $2.15 are expected to rise on their launch and the market is optimistic.  Retail brokers are calling the float’s launch at between $2.30 and $2.50, a positive pre-Christmas outcome for investors holding the paper.  But can it last?

Australian Stock Report head of research Chris Conway warns the company faces challenges in achieving real growth in value past $2.30 per share.

“Probably from there, the only way that they’re going to be able to make the business more profitable will be by cost cuts,” he said.

Retail investors who applied for the public offer have had their allocations scaled back to 60 percent of their requested quantities.

“We felt it was appropriate to allocate 60 per cent to mums and dads across Australia to ensure that they can appropriately share in the future of Medibank,” Senator Cormann said to the Herald Sun.

Medibank and ahm policyholders that were eligible for the offering have been allocated 33.2 per cent of shares ­issued via the retail offer.  The offer has also had a progressive scaling applied to larger buy bids to ensure all applicants were allocated.

In news reports via AAP, OptionsXpress market analyst Ben Le Brun predicts the stock will leap towards $2.30, and could hit $2.50 by the end of 2014.

“It’s going to capture the hearts and minds of the whole market,” he said.

“At this stage, it looks as if it’s going to be a very, very successful float.”

But as we know, a successful float on day one does not always yield a great investment.  Many significant listing has turned sour days or weeks after the optimistic and well promoted listings.  Have you ever taken a risk on a large public listing only to find it turn down after the marketing and launch was done? Do you think Medibank Private will be a positive story for months to come?  Share your thoughts today…

Rebecca Wilson

Rebecca Wilson is the founder and publisher of Starts at Sixty. The daughter of two baby boomers, she has built the online community for over 60s by listening carefully to the issues and seeking out answers, insights and information for over 60s throughout Australia. Rebecca is an experienced marketer, a trained journalist and has a degree in politics. A mother of 3, she passionately facilitates and leads our over 60s community, bringing the community opinions, needs and interests to the fore and making Starts at Sixty a fun place to be.

  1. No windfall for me, this is my health fund…guess I will be going somewhere else as prices rise and services decrease when shareholders demand more money…..on the fund they invested in because of its good reputation. Well my message to shareholders is, mess with medibank private at your peril, leave it like it is if you want what you invested in

  2. I think this govt is selling off medibank private knowing it intends to cut the rebate to private health insurance. If that happens the average worker or pensioner won’t afford to be in it.

  3. I belong to the health fund that is run for the members – not the shareholders. That’s what they are supposed to be for…..

  4. BEATS ME! How can they sell Medibank to us, when it already belongs to us? The exact same thing happened with Telstra! What a bloody con – I would like to think no-one will purchase any shares in this, but I guess that’s just too much to hope for.

  5. I wouldn’t on principle. Medicare was established as a safety net and became Medibank (note the bank in the title! ) and now the govt are milking it again. Bring back MediCARE, I say!

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