Thursday, October 8, 2009

Kathmandu No.1 but IPO should get the Bullet

It pains me to say this but the Kathmandu IPO (initial public offering) Juggernaut seems to have gained a massive head of steam since the media took the bait from the present owners of the company, Goldman Sachs JB Were's Hauraki Equity No 2 Fund and Australia's Quadrant Private Equity, who wish to rid themselves of it.

It reminds me of the frenzy of activity by owners of Burger Fuel Worldwide [BFW.NZ] in 2007 as they tried to push their IPO onto anyone that would listen to them and failed as the surface gloss of the brand vanished when people realised the numbers behind the IPO didn't stack up.

Many trees have died since in the writing of a number of Kathmandu IPO stories.

Here is another one.

The biggest Google search at present to hit the Share Investor Blog is for the term "Kathmandu IPO". Most of the traffic is coming from Australia, then New Zealand and then individuals in the United States.

The company makes and sells great outdoor gear but the health of the company is not good at present - lower sales, profit and very high debt levels. This is certainly not a recipe for long term investment success and is bound to end in tears for those blinded by the publicity machine rolled out by brokers and the usual suspects.

My biggest fear is that the owners media assault will manage to extract good money from those only too willing or ignorant enough to own a part of a recognised brand no matter how dubious the quality of the investment.

If you are interested, please think again and if you really do want to get a piece of the action buy Kathmandu shares on market when they have been given a chance to reach their true value based on fundamentals rather than on glossy IPO documents, and media/management spin.

And hey, lets be careful out there!


Related Share Investor Reading


What is Jan Cameron up to?

Kathmandu @ Share Investor

Kathmandu IPO: What is it worth?
Kathmandu IPO: Retail Interest High
Kathmandu IPO: A tough mountain to climb
Kathmandu No.1 but IPO should get the Bullet
Download the detailed Kathmandu Value Cruncher Report - Requires free registration Share Investor Forum to download
Download Kathmandu IPO Prospectus

Discuss Kathmandu at
Share Investor Forum

Related Amazon Reading

Initial Public Offerings
Initial Public Offerings by Richard F. Kleeburg
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c Share Investor 2009