If you were unlucky enough to receive an allocation in the McAleese Ltd (ASX: MCS) initial public offering (IPO) last November, or unfortunate enough to have decided to purchase stock on market since the IPO you are no doubt bewildered by the transport company's second profit warning which has sent the share price down 15.5% to close at a new all-time low of 43.5 cents.
It's a far cry from the $1.47 float price and for shareholders it's now a question of whether to wait and see if the share price can regain some ground or whether to cut their losses and move on.
Perhaps one comforting factor for investors is that Chairman and now CEO Mark Rowsthorn – who was previously CEO at rail freight company Asciano Ltd (ASX: AIO) and before that a senior director at freight and logistics group Toll Holdings Limited (ASX: TOL) – owns around 30% of McAleese, so at least he is feeling the pain of the company's dismal performance too!
Foolish takeaway
McAleese has certainly been the worst of the recent bundle of floats to hit the market and a far cry from Beacon Lighting Group Ltd's (ASX: BLX) 60% gain on debut. It's a good reminder that IPO investing does not guarantee profits and sooner or later – in McAleese's case sooner – the stock price will be driven by fundamentals not hype.
With a burdensome $213 million of net debt and equity of $279 million investors may be best off letting a potential rebound in McAleese pass them by.
