Spare a thought for shareholders who received an initial public offer (IPO) allocation in last year's McAleese Ltd (ASX: MCS) float with the stock now having lost 51% after yesterday's sell-off.
The bad news at McAleese began even prior to the company floating at $1.47 in late November 2013, after one of the company's trucks was involved in an accident. While the owners and investment bankers managed to get the IPO away after the accident, the authorities weren't about to let the trucking firm off without scrutinising the trucking fleet.
A mixture of this increased scrutiny and the subsequent loss of fuel haulage contracts has forced McAleese to downgrade profit expectations and issue a 'Business Update' which has guided the market towards expecting a net profit after tax (but before significant items of which there will be around $44.7 million) for the first half of just $300,000. After this update was released to the market yesterday the company's trading halt was lifted – which had been in place since the 13 February and the shares subsequently plunged 34.5% to 72 cents.
Foolish takeaway
It will be interesting to read the latest updates from stockbrokers. A number of brokers came out in early February when the stock was around $1.08 declaring McAleese's shares a bargain and IPO shareholders certainly won't be pleased with how things have played.
