Three Poundland? Shares triple the price of products

IPO Watch: it's the first day of conditional trading for the London Stock Exchange's newest additions, Poundland and Pets At Home.

by Emma Haslett
Last Updated: 08 Oct 2014

It is deliciously ironic that, on the first day of trading for bargain basement retailer Poundland, its shares were priced at 300p per share - ie. thrice the cost of its products.

But Poundland had a huge response to its offering: its share price started right at the top of its range, valuing the whole company at £750m, then rose by 62p. At one point it was worth about £900m.

Pets at Home has its tail between its legs by comparison: its shares were priced at 245p, at the midpoint of its range, valuing it at about £1.2bn, but slipped to 240p this morning.

That’s by no means an indicator of its future performance: if Facebook has proved one thing to us, it’s that even most disastrous IPOs (and this isn’t one of those) can be recovered if management plays its cards right - so for more risk-averse investors, this might be just the right time to buy Pets at Home shares.

And let’s not forget Poundland is a business that came into its own during the recession. Now the economy is in recovery, will consumers still be as keen to bag a bargain? It’s all still to play for. The real tell will come on Monday, when unconditional trading begins.

Finance Retail

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