priced 40m shares at $30.01
Note however Peter could have gotten 33 for each share and also moved the entire lot. Instead, he chose to sell at the reduced price of 30.01 to try to get the stock spread into more hands.
Even dropping the price only brings the total number of bids to 8,282. Since each bidder could have bid multiple bids in, the actual number of shareholders is somewhat less that 8,282. Then take away the "flippers" and you have a relatively small base of shareholder.
The discount pricing also shifts many shares out of the large guys hands and directly into single lot shareholders. At 33 Peter could only move the entire lot of 40m shares. At 30.01 he could move a whopping 145m shares so the final allocation percentage is just 27.5%. That robs the large bidder of most of his shares and reallocates them to single lot shareholders.
Peter is very well served by spreading out the ownership into as many retail hands as possible because hopefully they will not flip the price around and cause too much volatility. To see how this works look at how the allocations actually shake out:
Those that bid 100-700 shares will get just one round lot of 100 shares allocated. So, if you a retail investor bidding one round lot you get a full allocation.
Those that bid 800-1000 shares will get just 200 shares, etc.
To get 1000 shares you would have had to bid 3,700 shares. For 5,000 shares you would have had to have bid 18,200 shares.
Now, if you bid 100@32 100@33 100@34 100@35 and 100@36 you may get all 500 filled at 30.01. Yet the guy next to you that bid 500@37 will only get filled with 100 shares. So there are some quirks to the system.
No doubt they can move a lot of stock and there is strong interest in it. The move up to 33 is all but assured, after that the momentum of 145m desired, 40m available will probably propel the stock up strong.
The final question however is "who is going to hold this thing long term?"
Rick |
