Retail investors in Meridian Energy will pay $1 per share as a first installment and no more than 60 cents per share as a second installment – up to 30 cents less than institutional investors.
At a .30c price differential ‘Mum and Dad’ retail investors would be crazy not to buy a couple of thousand dollars worth of Meridian shares and then flick them on as soon as they float, If you buy $2000 worth of shares and sell them the day of the float at the institutional price you make $400, no risk. Minimum. The shares are probably undervalued, so will probably go even higher than that.
It’s a big loss to the taxpayer of course. Millions of dollars thrown away for nothing except, crucially, Bill English and John Key will get to put out a press release citing the huge number of New Zealand ‘Mum and Dad’ retail investors who pre-bought Meridian shares.