Good morning!

Sorry there was no report yesterday - I had a relaxing day lounging by the pool, and there wasn't much in the way of news to report on anyway. Am flying back to the UK on the overnight Sat-Sun flight.

I've enjoyed Abu Dhabi very much, although the lack of civil liberties & human rights is a nagging concern. There again, the payback for that is a lack of crime - something everyone can enjoy every day, providing you don't fall foul of the law in some way.

Radio 4 - BHS

Last night, Radio 4 broadcast a very interesting programme, "The Briefing Room" concerning BHS & Sir Philip Green. They used a couple of recorded clips of me, about halfway through.

It's an excellent, and very balanced programme, in my view. Here's the link to the audio.


The IPO market seems to be perking up again. I'm seeing new floats almost every day in the news feed. Hotel Chocolat (HOTC) is of particular note, because it has launched very successfully on AIM at 148p per share. In the first 2 days of trading, the price leapt to an immediate premium, and is now about 207p, or 40% up on the Placing price.

The founders still own 66.6% of the stock, so that small free float and strong demand have combined to squeeze the price much higher. Whether the shares offer value for money, is another question. I had a look at the Admission Document, and it seems to have had strangely erratic profitability. There was a sharp fall in profits due to a failed IT project, and cessation of operations in USA, and somewhere else. That doesn't exactly fill me with confidence.

I wonder if it will join the long list of companies which warn on profits 6-12 months after listing? Time will tell.

IPOs generally seem to be very poorly structured. The promoters clearly want to do as little work as possible, in return for a large fee. So they just place big lumps of shares with Institutions. Combined with founders often retaining a large stake, this means the shares launch with virtually no liquidity. How on earth does that make sense?

Instead, I think companies should insist on a decent chunk of the shares being offered to private investors, in relatively small parcels. This would greatly improve liquidity from the start, which is surely the whole point of…

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