Monday, June 20, 2011

IPOs Recently Debut. What Has Went Wrong on XOX Berhad?

Lately we are seeing some few new IPO counters are facing some problem or difficulties when they went for listed recently. The demand or their performance was under performing especially the UOA Development Berhad. The public issue was offer at RM2.52 and the institutional prices were offer at RM2.60 but on the day it was listed, the share prices were opened at RM2.60 per share. This is something quiet shocking to many of the new investors who have just invested in this share through IPO and they are seeing some losses on their listing day until today.

That goes with XOX Berhad recently listing when we saw their share prices open at discounted IPO price on their first day opening and the prices tumble 35% until closing. The IPO prices were offer at RM0.80 to the public but was listed at the opening RM0.73 before it closed at RM0.52 on that day. It seems that the trends of new listings are not doing well on their debut. Maybe this is due to our recently Malaysian share market dull performance.

Basically we didn't blame if those two shares were listed and were traded below their IPO prices (willing buyer willing seller basis) but one thing for sure we have an issue to argue on the recently listing of XOX Berhad. Recently before the listing of XOX Berhad, one of the Investment Bank did offer us to take up the shares of this company.

Before the shares were being offer or open to the public to apply, we were being offer to take up the XOX Berhad at the price of RM0.80 per share. The offers come from one of our friends and we have decided to take a portion of it. During that time we were just waiting for the time to make the payment to the Investment Bank.

Few days before they asking for the payments, we were surprised that the shares that they were offer was below their offer price. We were told that the XOX Berhad share is offering at RM0.75 per share. A discount of RM0.05 per share from the issue price of RM0.80. Another Investment Bank (one of the remisier) also did the same thing; offer us at discounted price of RM0.05 per share. We were so surprised that this share was being offer at discounted prices. We were so curious and we even make a few survey and we were told that previously before the listing exercise the shares were being offer at RM0.70 with huge block being place out to certain identified investors.

How true the shares that being offer and place out at RM0.70 per share? We are not quite sure about it as we don't have any prove to show it but one thing for sure the shares were being offer to us at RM0.75 per share. During that time we are still considering whether to take up the shares or not, until we found out about XOX Berhad financial reports. We withdraw the deals because we were quite uncomfortable with their discounted price and XOX Berhad financial reports but a group of our friends are taking that offers. We heard that they incurred huge losses on the listing date and even some of them are still holding some of shares until today.

The question is?

1) Was it right for the Investment bank or anyone who have involved in this deal to make such an offer at discounted prices before being offer to the public to apply? It is unfair to the public.

2) Why the offer of the XOX Berhad was being offer at discounted price? Could it be a technique or some strategies from the Investment Bank to dispose the shares as soon as possible? By using this method, they would be able to unload all their shares for private placement even faster outside the market.

3) Could it be the existing major shareholders (who are laughing all the way now) given such a discounted price from the approval offer price of RM0.80 per share outside the share market before the listing exercise completed?

4) Why the Securities Commission (SC) able to approved such a listing in the first place? Was it because of their associated company or maybe their big supporter was Celcom Axiata Berhad?

Please refer to this website for more comments on XOX Berhad. http://whereiszemoola.blogspot.com/search/label/XOX

Because of such an unhealthy practice, the new IPO application are facing some new dilemma whether it would be a trend that such a new trend of new listing would not doing well when they were listed. From our point of views if these matters never really being taking care off or being watch closely in the future, it would be unfair to most of the investors who are looking for an opportunity instead they were being cheated for applying an irresponsible act from one of the listed company recently.


It is just like cheating public's money. Right now we have to monitor whether XOX Berhad have the abilities to perform based on their statement given by its CEO that stated the company WILL turn around and post a net profit of 19.8 million in 2011 after it had post a Loss of 13.1 million in 2009 and a HIGHER Loss of 16 million in 2010.

3 comments:

mapsscom said...

THE PRICE THE RAKYAT HAS TO PAY FOR VOTING THE BN GOVT.DO NOT EXPECT "FAIRNESS,EQUALITY,MORALLY RIGHT,GOOD CORPORATE GOVERNANCE,CSR N OTHER SIMILAR NOTION" ENCOURAGED BY THE ADMINISTRATOR OF OUR GOVT.,.THE CAN ONLY TALK.THEY ARE POWERLESS TO TAKE ACTION.THEY ARE CONTROL BY THE BN POLITICIANS OF THE DAY.THE GAME IS "HIT N RUN WITH NO MORAL BIAS".BE A CROOK N U WILL BE APPLAUDED.THINK DATUK T,MCA PRESIDENT,FELDA CHAIRMAN N THE OTHERS.STILL HOPING FOR "FAIR GAME"?INVESTOR BEWARE!

Anonymous said...

mapsscom....HOW COULD YOU BLAME EVERYTHING ON SOMEBODY ELSE EXCEPT YOURSELF. YOU SHOULD BLAME IT ON YOUR OWN STUPIDITY. YOU ALWAYS THINK SOMEBODY ELSE WILL TAKE CARE OF YOU.

charlie said...

jail the board, or merchant banker or the approving authorities.
They manage busines to make money.
we better manage our money wisely