Q: I would appreciate your opinion as to whether the $20 pricing of the new IPO Groupe Dynamite (GRGD) issue is attractive. Thanks!
5i Research Answer:
Pricing was at $21. We are generally very cautious on Canadian IPOs. The fact that shares fell after issue makes us even moreso. Fund managers are not likely to buy a new company five weeks before year end. The lack of follow-on demand likely means the stock may drift some more. We think there is time here for buyers, and to see how the company fares with public reporting, forecasting and execution.