Medibank Private Ltd (ASX: MPL) has extended its steep fall today and looks increasingly likely to fall below its float price in the near future.
Early in today's session, the stock fell by as much as 2.6% to just $2.095, despite a strong start for the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). While that represents an agonising 19.1% decline from their record high of $2.59, which was achieved in February, it is currently sitting just 4.5% higher than the price of $2.00 per share that retail investors initially paid for their stake.
Although the stock generated plenty of hype early in its life as a publicly-listed stock, investors have since cooled on it as an investment prospect. They have not only realised that its sheer size could actually put it at a disadvantage to smaller rivals such as BUPA, HCF and NIB Holdings Limited (ASX: NHF), but have also started to question its ability to grow earnings in the long run – especially after it has reduced costs and improved operating efficiencies.
Should Medibank Private's shares fall further, it could be an investment worth considering, but at today's price investors would be wise to add the stock to their long-term watchlist and focus on some of the market's compelling investment opportunities.
