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Good News Friday . . . Foxtons Extraordinary IPO

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If you see a parade of brightly colored Austin Minis driving in circles around Piccadilly Circus later today, it will be Foxtons (LSE:FOXT) celebrating the company’s extraordinary IPO on the London Exchange today.

My perspective on IPOs in general is that anything goes.  With Foxtons’ IPO everything went!

The company floated 169.4 million shares.  It had set an initial range range 190.0 pence to 230.0 pence.  At the 230.0 mark, the sale had a potential marketer cap of £649 million, with the offer itself raising £390 million.  But this was no Facebook IPO.  Within the first hour, more that 50 million shares exchanged hands and the share price had jumped as high as 286.0 whilst observers were catching their collective breaths.

CEO Michael Brown, in perhaps the greatest understatement in British history said, “We are delighted that our initial public offering has been successfully received and that there has been strong interest from investors.”  In private he said that he was so excited that he could pee his pants.  And he probably did.

Shares were sold today as conditional dealings.  Foxtons’ admission to the LSE is expected to take place next Wednesday, 25 September, at which time accounts will be settled and conditions removed.

As usual, there is all kinds of speculation as to why this anomaly occurred, but I don’t want to go there.  Speculation is no more than . . . well, speculation.  It is what puts everyone in a tizzy.

What caused it, from a pure business standpoint, is irrelevant.  I’m going to settle for accepting the cause to be investor confidence and leave it at that.  I’m happy that the timing coincided with a Good News Friday.  BC Partners, the private equity group that had been the majority owner is happy because they stand to gain almost three times what they had invested in Foxtons.  It has been rough sailing following the 2008-2009 financial crisis in the real estate market, so that entire sector is happy.

Last, but not least, there is Michael Brown and the other Foxtons execs.  If they do have that parade at Piccadilly, you can be certain that they will be leading it, as their personal investments just became their personal fortunes.

Join me in a toast to Foxtons for making this a Good News Friday!  May your good fortune be like the capital of Ireland – Always Dublin.

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