Medibank Private offer - anyone in?

[Isochronous]

Aiming to sell on first day of trade for a quick 10%.

 

[cove]

If the market makes the price $2 it would look highly overpriced. Just hope the issue goes off at a lower price so there is a bit left for the early sellers on day one. Trying for a day one profit can be pretty risky and the possible scale back might make the stag profit pretty modest.

 

[Warks]

Could anyone order more than $5000 worth in one go?

 

[cove]

Yes I went more than that with the policy holder applications and the general public offers.

 

[ozkid]

Yes can order as much as you like but given the large oversubscription (twice over allocated even on Day 1) the actual shares received will be scaled back

 

[ozkid]

I think there will be demand particularly as the institutionals will have to go into the market to buy shares, to balance their portfolios

 

[defurax]

Could anyone order more than $5000 worth in one go?

Yes, with the caveat that retail price will only apply to the first $250,000. From the prospectus: "The Retail Price will only apply to the first $250,000 worth of Shares (rounded down to the nearest Share) allocated to you under the Retail Offer. If you are allocated Shares above $250,000, you will pay the Final Price for those Shares."

 

[cove]

Yes the public are due to get 60% of the float and members of Medibank Private get a small/ better allocation compared with the general public.

 

[Pushka]

Stupid question. We've registered our super fund through NAB. Then recently received the advice from Medibank. So entered the required number and selected NAB as the broker. Then was directed to contact NAB. So I'm spinning in circles. What do I do next as there's nothing in NAB trade that assists me.

 

[cove]

I just entered the 4 HINs for the Commsec accounts and mailed them.

 

[Pushka]

But there isn't anything for me to mail. I've received nothing from NAB just an email directing me to the share website which then directs me (in words) back to NAB.

As an aside, NAB trade sends emails that contain direct links to their log in page. I've spoken to them a few times and emailed them that this practice is stupid as some might think that a similar phishing email purporting to be from NAB will end in disastrous results for the customer. But they continue to send emails with direct links to accounts. If I didn't have so much tied up with NAB I'd leave.

 

[Warks]

I had exactly the same problem with Commsec - the Medibank site told me to call them. Then Commsec had some gibberish only understandable by financial types.

CommSec is intending to accept Broker Firm Offer Applications on the CommSec website from 5pm Friday 31 October 2014. Subject to investor demand, CommSec may close its portion of the Broker Firm Offer early.

But after 5pm on Friday I found I could place an order but only to a maximum of $5000. That's why I asked. I could go in and grab more in lots of $5000 perhaps?

 

[yo yo ma]

I'm in for the long-term... Hopefully they will be as good as CSL who listed at 0.77c in June 1994. They are now $80.19 at the close on Friday.

 

[drross]

love a positive outlook

 

[whatmeworry]

I'm in for the long-term... Hopefully they will be as good as CSL who listed at 0.77c in June 1994. They are now $80.19 at the close on Friday.

I was reading somewhere that if you bought $1000 of CSL you would be a millionaire now, IIRC.

 

[cove]

I received 10 prospectuses in the mail and used 4 with two as Medibank Private members. One I have is for work and one is for my son who has been in Albany working this weekend. He can decide for himself tomorrow night.
I mailed the 4 with cheques today.
While I think $2 is a joke high price the business will get a good chance of getting managed better once it is no longer owned by the Government. Hopefully the institutions get the price down to the lower price range but I doubt it will go off for less than $1.75.

 

[a330j]

If you are flicked to your broker from the application page, my understanding is that you have asked for a broker allocation. When you fill in your application (online) tick the box for general issue which will get you through to the details page where you can then fill in your broker details so the shares are allocated under your CHESS identity (ie the shares are registered with your broker). Important if you want to sell them through your broker. If you want a broker allocation you need to talk to your broker.

My take on it is that its unlikely to be another T1 or CSL or CommBank. It has a few more hairs on it than those floats:

• chances are the price will be at the $2 end of the range which places it on a high PE relative to its peers and the market;
• it is leaking customers to its subsidiary AHM, putting pressure on profit margins;
• a larger proportion of its income relative to other health insurers comes from investment income (this proportion will increase as it proposes to increase funds exposed to equities from current levels). In other words if share prices drop, so will its income; and lastly
• it has done some creative accounting on the dividend yield it expects to pay. It will pay a dividend after the float of 4.9 cents per share in the 7 months remaining in 2014-15. On an annualized basis this equates to 8.4 cps or 4.2% (the number promoted in the prospectus). There is an implication that this will continue into the future. Now MB has said that it intends to pay 75% of earnings as dividends. To maintain the bandied-about 8.4cps at a 75% payout ratio the following years earnings would need to be 11.2cps - a 19% increase in profit. A tough ask. Don't be surprised if there is a reduction in near term dividends.

Against that the index funds will need to buy the shares to reweight their holdings potentially putting upwards pressure on the price (although from when and for how long is unknown) and cost and operational efficiencies can be improved which would improve profit margins (this likely means a lot of employees will lose their jobs).

My 2c

 

[Pushka]

Thank you a33j. I think that would work when I have been flicked. I'm still not convinced yet though. If I'm limited to $5000 in my SMSFs then I've been trying to avoid smaller investments anyway. But will check out options today.

 

[lovetravellingoz]

Seems to be a play for some Stag Profits...but only say 10-30%. Offsetting some of that is your allocation will get scaled back (perhaps even the majority will be refunded), and so they will get to use some of your money for a while before returning it (ie that money could have been offsetting your mortgage etc) and that that portion will have earnt you nothing.

Long-term does not look good unless they can really drive large efficiencies.

 

[Warks]

This summary of the prospectus has been posted on the SMH.

Six charts to see before buying Medibank shares