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Philips Lighting IPO completed

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The IPO of Philips Lighting was successfully completed this morning in the Netherlands with Philips Royal selling 25% of its stake at a price per share of €20. The shares had an indicative price range of  €18.50 – €22.50, so the IPO was priced slightly below the midpoint. I directly sold my shares at the open of the market at €21/share, locking in a nice 5% profit. It could have been more since so far the open is the low of the day, but I don’t think trying to speculate of the movement of the stock price past the open has a positive expected value.

Philips Lighting IPO illustration

Disclosure

No position in Philips Lighting anymore

Philips Lighting IPO: a small idea for my Dutch readers

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Philips, a well-known Dutch company, is going to separate itself in two companies later this month through an IPO. Usually participating in IPOs is a losers game for retail investors because the shares of the most attractive companies are often allocated to the most important clients of the big banks. Here in the Netherlands the situation is a bit different though, because retail investors often get preferential treatment and the case of Philips Lighting is not different.

Royal Philips is offering 37.5 million shares of Philips Lighting, and up to 10% of the offering is reserved for retail investors who will be allocated the first 250 shares without being prorated. This means that a maximum of 15,000 retail investors can subscribe to the offer without fear of being prorated. The shares have an indicative price range of €18.50 – €22.50. Since most IPOs are priced at a point where you are expected to make a profit on the first day of trading I have subscribed to a couple of shares. I don’t expect a big upwards move on the first day, Philips Lighting is not World Online, but just like ABN Amro last year I expect to make a few percent.

Philips Lighting IPO illustration

Disclosure

No position (yet)