Medilines Distributors reports of fractional allocations coming in
I have heard from several readers that their subscription requests through brokers were not allocated in full, and received some follow-up questions about what this could mean for the Medilines Distributors [MEDIC 2.30 pre-IPO] IPO generally, and what it might mean for those who have submitted subscription requests through PSE EASy specifically.
First, in terms of the MEDIC IPO as a whole, it’s difficult to say, without knowing more, what a few reports of fractional allocations might mean.
Brokers are not like the PSE EASy program: brokers have complete autonomy to do with their allocations whatever they want. Brokers can keep the entire amount for themselves, or they can choose to give the entire amount to just one client.
They can “reward” certain clients with maximum allocations, and then toss a few “fractional allocation” bones to lesser-valued clients. It’s completely up to the broker.
And since we have so many brokers, you can imagine how it might be challenging to draw conclusions from reports of some users receiving fractional allocations from a broker. In terms of what this might mean for the PSE EASy program’s tranche, it sounds to me like there are still shares available.
I’ve seen reports on Twitter of people receiving full allocations through PSE EASy, and I haven’t (yet) received any emails from readers warning of fractional allocations that might lead me to think that we’re in an oversubscribed situation with potential refunds.
MB BOTTOM-LINE
When I reported last week on the news that MEDIC’s institutional tranche was 2.7x oversubscribed, I said that we should wait to see what brokers and banks say over the weekend to see if there would be any more “oversubscribed” hype.
I didn’t see much of anything, to be honest. Makes me feel like the interest in this is not bottom-up, like AllDay Marts [ALLDY 0.73 1.35%] was, with hundreds of thousands of retail investors plowing into the IPO, but rather more of a top-down IPO like Converge [CNVRG 30.15 0.66%] was, with most of the interest coming from a relatively small number of “whales”.
From my perspective, I don’t see any great signals in all of this noise. I don’t feel confident drawing any potential IPO performance conclusions from the institutional oversubscription or the seemingly light retail interest in the stock, so I will be watching closely to see what happens on December 7th when this stock finally hits the market.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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