After joining AIM on what was one of the worst weeks on record since 2011 Management Resource Solutions entered the race with a bang, the shares traded down significantly on what appeared £30,000 worth of stock trading hands so I felt inspired to dig deeper into the obscene 40% swing. At 30p on 8am of listing day the shares come off quiet a bit leaving investors facing two issue’s.
1: Buyers were now feeling concerned the pricing of the IPO was incorrect.
2: New buyers couldn’t access the stock through their brokers.
MRS was an old ticker for a company called Melrose who I believe merged with another resource company, the ticker has sat idle until the Management Resource listing where the epic code was assigned to the new and unrelated company. This coupled with little stock in free float or stacked on brokers books made rushing to get the stock registered with many online retail brokers something of a secondary entity to going on the Christmas luncheon circuit instead.
A few days in and back to scratch the stock is now listed and ready with most retail brokers although a few are still dragging heels, On further investigation I’m reliably informed that £10,000 was out with the market makers on day 1 which means marking the book up and down on the flip of a five pence has been the order of the day. Any false suggestion the company did a pre- IPO at sub 10p recently has been quelled by the analysts who brought the company to market.
MRS has been doubling revenues YOY since its birth in 2007, recent interviews with the CEO suggest a better than expected start to this years campaign with a financial update due in January 2015. With moderate market interest I can see a decent run from MRS simply (If nothing else) because it aims to pay a dividend, Increased profits & revenue as well as a solid focus on governance with Xel & Fogl chairman and director sitting on the board of Management resource solutions.
Note: Low share issue / Free float stocks can be extremely aggressive! If the crowd back the bid then significant gains can be expected as the market makers don’t have enough banked to house a growing interest hence the quick mark up, however in the eyes of transparency should MRS fail to get the markets attention then you can expect the polar opposite which has already been shown.
Merry Christmas Folks