KEY POINTS:
Burger Fuel investors new to the sharemarket learned a quick lesson in market dynamics yesterday when the sale of just 1000 shares took $10 million off the market value of the company.
The fast-food firm that began trading on the NZAX on Friday with shares issued at $1 each closed yesterday at 81c after one shareholder opted to sell 1000 shares.
The seller of the shares was out of pocket by $190, but the 19 per cent drop in the traded stock reduced the total value of the 53 million shares from $53 million to $42.9 million - on paper at least.
Of those 53 million shares, 45 million are held by company owners Josef Roberts and Chris Mason in a private stake, and eight million are trading on the NZAX.
Of the eight million shares that were floated, 2.75 million shares were taken up between the two men to make up the shortfall after the float failed to raise the minimum $8 million.
Yesterday afternoon stockbroker Stephen Wright said there were offers to sell 3000 shares at 92 cents, 2000 shares at 80 cents and 35,000 at the listing price of $1.
He said the share price fall was in the nature of small share floats, whose price could be dramatically affected by trading a small number of shares.
"42 Below had a similar situation soon after it floated when its share price of 50 cents at float had fallen to below 36 cents."
Company chairman Peter Brook said not much could be read into the share price change because there was very little liquidity in the stock.
"There are just not the shares out there to buy. I think if you wanted to buy 30,000 or 35,000 you would be paying $1.20 per share," he said.
Burger Fuel marketed shares in the company directly to customers at its stores. An advertising campaign cost $1.2 million. Brook said: "I don't think there are many of the people who bought the shares for trading."