Costa shares drop on de­but

Townsville Bulletin - - NEWS -

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.

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