The price at which investors will receive their MYOB Group Ltd (ASX: MYO) shares has finally been determined, with the stock set to hit the boards at $3.65 on Monday morning.
In the lead up to its public float, the accounting software provider has received plenty of interest from investors which made it seem likely that the shares would list at the higher end of the indicative price range, which according to the prospectus was between $3 and $4. After having been narrowed down significantly over the last two days, an official price tag of $3.65 has been established, as is being reported by the Fairfax press.
While investors who participated in the initial public offering (IPO) will be pleased they're not paying top dollar for their shares, there is always the concern that the stock mightn't perform as strongly as many are anticipating.
Unlike Medibank Private Ltd (ASX: MPL), which skyrocketed in the months following its IPO in November, some investors are concerned that the MYOB IPO could be a dud. Indeed, there has been plenty of controversy regarding the numbers presented to investors with Rod Drury, CEO of MYOB's New Zealand-based rival XERO FPO NZ (ASX: XRO), suggesting they were misleading.
Xero has been gobbling up market share in New Zealand and in Australia, while it is also expanding into the US and UK markets. Drury claims that the numbers presented in MYOB's prospectus didn't provide an accurate description of where the company now stood competitively. Whether the market will be swayed by these revelations remains to be seen.
One way or another, I'm not participating in the IPO and have no intentions to purchase the stock anytime in the foreseeable future. Even at $3.65, I view the stock as being quite expensive and believe Xero would be a much better investment today, despite the fact that it is yet to record a profit.
