The Raslag [ASLAG 2.05 2.5%] [link] IPO hit the market burning hot, with the first trades coming through at the P2.48/share level, which represented a 24% gain over the P2.00/share IPO offer price.
This +20% price zone only lasted a few minutes before the weight of the sell orders started to wear the price down; rapidly at first, then more gradually as the day progressed.
After 30 minutes, ASLAG was around P2.15/share (+7.5%), at around 11:30 AM it was about P2.07/share (+3.5%), and after a light post-lunch rally, the stock ran out of steam toward the end of the day to finish on a dip down to P2.05/share (+2.5%).
The stock briefly traded for as low as P2.02/share in the minutes before the close, but that’s as close as ASLAG got to engaging the support of its stabilization fund.
ASLAG was the second most-active stock by value traded, with P569 million in ASLAG stock trading hands on the day, with P128 million of that total done in the first five minutes!
MB BOTTOM-LINE
This one was a lot of fun to watch, but maybe not as much fun for the traders that jumped in early on to snag all those shares around the P2.48/share high.
Any of those traders that are still holding ASLAG are sitting at around ~15% in paper losses on the trade.
Maybe there’ll be a bounce today, but given how quickly the stock tumbled down from those highs, I’m not looking for there to be a ton of buying interest above the P2.20 level. But who am I to say?
Who knows what will happen? The volume traded was over 60% of the public float, which is pretty high, and high public float turnover on the first day is usually not a great sign for the short term price of an IPO.
Sure, Solar Philippines NEC [SPNEC 1.57 4.85%] did about the same on its first day, and went on to double its IPO price within a month, but SPNEC seems to be the happy exception to the overall trend.
Will ASLAG join SPNEC as a post-IPO out-performer, or will it drift sideways and down?
Based on how investors are reacting to ASLAG, it feels like most expect the latter, and that’s probably the more likely outcome considering that ASLAG is a well-defined operational company with few moving pieces to its valuation puzzle, while SPNEC was a never-before-seen non-operational development company with plenty of potential risks and potential rewards that needed some time to be adequately priced by the market.
There’s not a ton of immediate downside risk because of the stabilization fund that will jump into action if the price tries to push below the P2.00/share level, but this fund has a limited life-span, and won’t be around after July 6. Or even sooner if more IPO investors look to get out over the next couple of weeks.
I’ll keep my eyes on it and update daily.
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