The debut of DNZ Property Ltd [DNZ.NZX] on the NZX yesterday while no means setting the world on fire did slightly better than I expected by finishing the day at 99c per share on good volume.
The issue price was 97c.
The true value of the company was hard to determine during the IPO process because of the Pro -forma figures used in the prospectus and the fickle value placed on real estate in the current environment but the market seems to have decided that value was there and bought additional shares on the stocks debut.
I personally don't think the company is worth as much as the market values it at (I am a contrarian bastard in most facets of my life!) and wouldn't want to do that until I saw a year or two of operating performance from the company.
Like most commercial property companies , DNZ is going to struggle in the current environment. Empty commercial space will put pressure on lease arrangements over the next year or two and I doubt whether prospectus promises will be attained.
There will be value in this stock but that will lie in a much lower share price given the uncertainty of the company and its future in the highly competitive commercial property market.
DNZ Property @ Share Investor
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