PriamryBid, the online platform for buying new issues and IPOs has announced that it will be providing retail investors with access to SSP Group PLC a FTSE 250 company.
The Issue Price for the Retail Shares will be equal to the mid-market closing price of SSP’s ordinary shares on 3 June 2020 which is the same price as offered to institutional investors.
Why is SSP Group (LON:SSPG) raising money with PrimaryBid?
PrimaryBid say that:
The net proceeds of the Retail Offer will allow for a proportion of the 2019 Final Dividend payment to be effectively retained in the business and further enhance the Company’s cash and liquidity position during this period of unprecedented disruption in the global travel market as a result of the COVID-19 outbreak.
You can see how the SSP Group share price has done in the below chart from Google Finance.
In some cases, new shares are issued at a significant discount to the market. Which makes them attractive to investors who want to get out quickly.
However, in this instance, the Issue Price for the Retail Shares will be equal to the mid-market closing price of SSP’s ordinary shares on 3 June 2020 which is the same price as offered to institutional investors.
Which means that there is no discount to the market price. But, new issues are still attractive to investors because they can save money on two different types of fees.
- No Stamp Duty – when you buy new shares there is no stamp duty charge as there is no change of ownership. Stamp duty is 0.5% so if you buy £10,000 you are essentially saving £500 by not participating in a new issue rather than buying in the open market.
- No Commission – when you buy the shares your broker does not charge (or normally) does not charge a commission on the transaction. Depending on what stockbroker you use, this can be a significant saving.
To find out which stock broker is best for you compare online stock brokers here.
Can you make money buying into the SSP Group New issue?
When we interviewed Kieran D’Silva from PrimaryBid we discuss the pros and cons of investing in new issues and IPOs. The key fact is that even if a stock is offered at a discount through a placing it doesn;t mean that it will go up afterward.
To see how recent new issues have performed take a look at PrimaryBid to see the track record of the new issues they have helped retail investors particiapte in.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.