You have to hand it to the McGuire brothers of Trintech, they get top marks for bravery by not getting fazed by the big fall in technology stocks the day before Trintech was due to float on the Frankfurt Neuer Markt and Nasdaq.
That bravery has been rewarded by a sturdy 20 per cent rise in the share price since the IPO - an excellent performance given the uncertainty in the industry generated by Microsoft president Steve Ballmer's attack on the "absurd" overvaluation of technology stocks. The day, the Neuer Markt lost almost 4 per cent, Trintech rose by more than 20 per cent, a performance that drew plaudits from market-watchers.
Analysts said that Trintech's shares were boosted by a scarcity factor and by the fact that it did not postpone the flotation whereas many German investors had to endure at least five recent delayed POs.
Heiko Bienick, chief analyst with Independent Research in Frankfurt, said his firm is going to wait and see how Trintech performs before recommending clients buy the shares.
He told CBS Marketwatch that the Neuer Markt is currently flooded with companies, many foreign, who want to list. His firm recently attended seven out of 15 presentations from companies looking to list on the index. In a normal week, they would attend two or three, he said.
He said some investors are wary that foreign companies are flowing into the Neuer Markt with little understanding of German markets and an eye on a fast buck. "People are watching them with scepticism. A lot of private investors have had their fingers burned in the last month and institutional investors haven't enough money to buy every new company coming onto the market," said Bienick.
Stefan Albrecht, managing director of Internet investment bank Net.IPO in Germany, said many technology companies are choosing the Neuer Markt, which he said is favoured over the Brussels-based Easdaq as the index for technology shares in Europe.
Albrecht said Trintech fared well on its opening day because it was not priced too high and the company is seen as a quality company. The fact that it's based partly in the US and not just focused on Europe has also encouraged investors, he said.
