Monday, January 1, 2007

Nissan Copper: A Failure!!

Nissan Copper raised some funds through IPO. The IPO was over subscribed only 4.7 times but the stock hit the market at 230% premium. Yes!! It was at a 230% premium.

Well do you smell anything fishy?? The IPO gets oversubscribed only 4.7 ties but the stock rises 230%. Yes it is fishy. The Stock is going to hit the bottom very soon.

Here is the story:
The IPO prospectus gave 2 years financial statement. There was a very extravagant growth in recent year. If you consider the Stock based on the latest profits, the stock was way too cheap. But if you consider the stock based on the earlier profit, the stock wasn’t that cheap.

The IPO was not, too much, over subscribed for the fact that in 2006, the copper prices had gone sky rocketing due to acute supply problems. Copper was the best investment for 2006. Naturally Nissan showed a very good profit in the latest financial year.

Its really a pathetic situations for the people who jumped the band wagon to make it a 230% premium stock.

The Stock is plunge way down very soon. I think it’s a stock to be monitored. The stock may go so low that it may turn out to be a very cheap stock looking at its actual growth prospects.