The Minerals 260 Ltd (ASX: MI6) share price has been losing momentum the minute it debuted on the ASX.
The new company is a spin-off of Liontown Resources Limited (ASX: LTR) and its non-core lithium assets.
Minerals 260 had a successful oversubscribed initial public offering (IPO), raising $30 million at a listing price of 50 cents per share.
It made its way to the ASX at 1:00 pm on Tuesday, opening as high as 74.5 cents.
Traders might have used its strong open as an opportunity to offload shares. After all, who wouldn’t want to lock in a 50% gain?
The Minerals 260 share price closed at 60 cents on Tuesday, a 20% return for those who managed to participate in the IPO but a 20% decline from its opening price.
Its share price has continued to crater on Wednesday, sliding 13.33% at the time of writing to 52 cents.
Why the Minerals 260 share price is plunging
It’s not uncommon for IPOs to fizzle out after listing, especially if there’s a lot of hype surrounding the company.
Take Zoom2u Technologies Ltd (ASX: Z2U) for example. The delivery Software as a Service (SaaS) company closed at 43 cents on its first day of listing after an IPO offer price of just 20 cents.
It would continue to rally for the next 5 trading days, reaching highs of 83.5 cents.
Just two weeks after its all-time high, the Zoom2u share price almost halved, trading at around 45 cents.
Some of these listings have managed to climb and surpass prior highs, while others have continued to trade sideways for quite some time.
Fortunately for the Minerals 260 share price, it’s currently trading just above its listing price.
Should you invest $1,000 in Minerals 260 right now?
Before you consider Minerals 260, you’ll want to hear this.
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*Returns as of August 16th 2021
- Minerals 260 (ASX:MI6) share price leaps 36% following IPO
- ASX lithium shares lift as spot prices hit all-time highs
- Minerals 260 (ASX:MI6) shares set to hit ASX boards today
- Liontown (ASX:LTR) share price lifts ahead of Minerals 260’s IPO
- How did ASX lithium shares perform in the FY22 first quarter?
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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