Well I bought some at $1.35 thinking I'd buy more as it comes...

Well I bought some at $1.35 thinking I'd buy more as it comes down - it never did! I'm not complaining, although I wish I bought more.

Its interesting to compare MCE (and its share price now) to 2 other stocks that listed around the same time - Kathmandu and Myer. (and their share price now). Both Kathmandu and Myer were sold in an IPO by private equity firms. i.e) the money raised from the IPO (retail shareholders buying shares) was used to buy out the private equity firms stake in the company. They sold 100% of their stake to retail "investors". And in both cases, management hold less than 2% of the respective companies.

On the other hand - the management of MCE hold 45% of the company AND the proceeds from the IPO i.e) the money raised from the IPO (retail shareholders buying shares) - was used to INVEST BACK INTO THE BUSINESS.

Moral of the story?

NEVER buy an IPO that is a private equity job. Or, maybe more correctly, CONSIDER buying an IPO when it has these characteristics:

1. Management/Owners retain a high % of the new listed entity.

2. The money raised from the IPO is invested abck in the business.