The corporate regulator is right to cast a sharp eye over the ill-fated $44 billion sharemarket IPO of neocloud Firmus, including whether the banks behind the float misrepresented demand for shares to potential investors or were incentivised to distort the apparent demand during the bookbuilding and marketing process.
In the days before the listing was pulled, Firmus’ bankers, including Morgan Stanley, JPMorgan, Bank of America and Morgans Financial, had told the market that big existing shareholders, led by Nvidia, Blackstone and Coatue, already spoke for half of what the company planned to raise. Fund managers were also told that demand far exceeded the stock available at the original $11 offer price – which was later slashed in a desperate ploy to save the transaction. One Morgans adviser wrote to clients urging them to “get a rattle on” to buy into the bookbuild, saying there was outsized demand.
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