Costa shares drop on debut
SHARES in fresh produce giant Costa Group have fallen on its Australian stockmarket debut, but it’s unlikely to dismay the company, an analyst says.
Australia’s largest horticultural company began trading at $ 2.23 at noon yesterday, 2¢ below the $ 2.25 price investors paid as part of its initial public offering. The shares finished at $ 2.16.
Motley Fool Australia research analyst Scott Phillips said despite the fall, the company would view the debut as reasonable.
“It seems the company has priced shares relatively close to what’s fair value,” he said.
“Those investors looking for a stag profit on day one of the listing, who did not get it this morning, are probably heading for the exits.
“Costa’s sellers sold at what was a reasonable price and the company itself is trading at not too far off the initial public offering price.”
The company was founded by the family of Frank Costa, former president of the AFL’s Geelong Football Club and Costa Groups’ current nonexecutive director.
It began as a single fruit shop in Victoria more than 100 years ago and has built up to a market capitalisation of more than $ 700 million.
SLOW START: Costa Group co- founder Robert Costa checks out the company’s produce.