While the TSX Composite index is up 6.98% the first three months this year, the month of March was quite turbulent with the index up just under 1%. The unsettled market has had an impact on the uptake of MDA’s initial public offering which is scheduled to be listed next week.
Bloomberg last night was the first to report that MDA wasn’t going to get its preferred price per share for its IPO of between $16 – $18. Instead the company sold 28.6 million shares at $14 a share raising $400 million from institutional investors according to the Globe and Mail. That’s 20% below the hoped for raise of $500 million.
The Globe and Mail report states that “One of the sources said investors expressed hesitancy during the marketing of the deal due to the choppy markets and particularly a recent slide in share prices for many newly issued stocks. The IPO market, particularly for Canadian tech stocks, has been at its busiest since the dot-com boom and market watchers are beginning to talk about ‘deal fatigue’ on Bay Street.”
Even with the lower price per share and raise, Northern Private Capital must be pleased with the outcome at this point. The valuation of the company after the IPO is expected to be triple their initial investment. It will be interesting to see how the market treats the stock when it goes public next week on the TSX exchange under the symbol MDA.
MDA was expected to issue a press release today with an update.