News Column

Business: Agenda: A share price that rises like the housing market

August 10, 2014

Simon Goodley

Despite recent form, it is possible for shares in new flotations to go up as well as down. For example, shares in the property website Zoopla are about 9% dearer since floating in June - and that's against a falling market.

Clearly, there's still time for the company to mess things up from here, and we get its trading numbers this week, but the City seems initially impressed by the unorthodox idea of pricing the shares so they have a chance of rising. That approach might catch on.

The theory is that those in senior management have quite a lot to do in actually running their businesses, so it might not be a brilliant idea to lumber them with the extra task of constantly explaining to disgruntled shareholders why their new investment has crashed so quickly.

Intriguingly, Zoopla's finance chief is Stephen Morana, who did the same job at the online betting exchange Betfair. The stock-market debut of his old employer is considered a test case of how not to float a company, and the capable Morana has frequently mused to friends about writing a book by that title. There's now a danger of a more positive sequel.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Observer (UK)

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