When it comes to ASX initial public offerings (IPOs), it often seems to go in one of two ways. An IPO can pay off big on its first day. Or it can lead to bitter disappointment with a share price slump.
Fortunately for investors in Close the Loop Ltd (ASX: CLG), this company's inaugural day of ASX trading today seems to fall into the former category.
Close the Loop shares have just IPOed on the ASX boards. And so far, it's going well. To understate it. The company is currently trading at 31 cents a share. That's a whopping 55% ahead of the initial IPO pricing of 20 cents a share that the company took its shares to market at. No doubt there are some champagne corks being unleashed over at the Close the Loop company offices as we speak.
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Close the Loop share price rockets on IPO
Close the Loop is a company that is aiming to provide 'end-to-end' solutions for the designing, manufacturing and recycling of products (hence the name). It's actually a newly merged entity. It follows the marriage of the old Close the Loop with O F Packaging.
Here's how CEO Joe Foster described it this morning:
Today, Close the Loop becomes Australia's most advanced vertically integrated design, manufacturing, collection and recycling company, that reduces waste to landfill and gets recycled content back into new products.
Our award-winning packaging products and regenerative uses for plastics help companies stay ahead of evolving recycling guidelines and regulations.
So the company raised $12 million ahead of its public float from the placement of its shares at 20 cents each. That price valued the company at a market capitalisation of $65.9 million. At the company's current post-IPO price of 31 cents a share, its market cap would be closer to $102.15 million.
