The Austral Resources Australia Limited (ASX: AR1) share price is plunging lower on the company’s initial public offering (IPO).

The copper producer’s stock hit the ASX for the first time at midday today. Sadly, it promptly dropped 15%.

At the time of writing, the Austral Resources share price is 17 cents, 3 cents a share down from its prospectus‘ offer price of 20 cents.

The dip follows not only the company’s float but also media speculation that Austral is soon to be hit with legal action.

Let’s take a closer look at Austral Resources’ dramatic first day on the ASX.

Austral share price starts out in the red

The Austral Resources share price is tumbling out of the gates amid media reports Austral’s former 51%-owner, Nathan Tinkler, plans to sue the company and its executive director.

Austral Resources responded to the speculation from an unnamed media source 2 hours before its IPO.

The company has confirmed claims Tinkler has threatened legal action against it and its executive director Dan Jauncey.

However, Austral Resources said neither it nor Jauncey has received “substantive documentation or information” on Tinkler’s claims. Additionally, the company believes Tinkler doesn’t have a feasible case against either party.

The company hasn’t disclosed which media outlet its response is aimed at. However, The Australian carried reports of Tinkler’s legal threat yesterday.

According to the publication, Tinkler sold his stake in Austral to Jauncey when copper prices dropped amid the global pandemic. He is now reportedly planning to sue for “shareholder oppression”.   

Whether Tinkler’s potential legal bid is weighing on the Austral share price is impossible to say.

Today’s float represents the end of an oversubscribed $30 million IPO process that, at its offer price of 20 cents, left the company valued at $89 million.

The funds raised will be put towards Austral’s new Anthill Mine and its Mt Kelly processing plant. It will also help fund exploration activities and pay off debt.

Austral expects to be producing 10,000 tonnes of copper anode each year from the middle of 2022.

The post Austral Resources (ASX:AR1) share price tumbles 15% on IPO appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher. At the time of writing, the benchmark index is up 0.8% to 7,385.4 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down 6% to 54.5 cents. Investors have been selling this infant formula company’s shares despite it announcing a key appointment in China. A few investors may be taking profit off the table after some very strong gains in recent weeks.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

The Dalrymple Bay Infrastructure share price is down 1% to $2.22. This morning the infrastructure company announced a A$514 million private US placement. According to the release, Dalrymple Bay is raising the funds via fixed rate senior secured notes. The notes will be issued in three tranches of approximately A$185 million, A$215 million and A$114 million, with tenors of 10, 12 and 15 years, respectively.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price has continued its slide and is down a further 1% to $4.45. Investors have been selling this insurance giant’s shares since it downgraded its margin guidance for FY 2022 following a surge in claims. This was driven by recent severe storm across parts of Australia.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is down 4.5% to $3.70. This is despite there being no news out of the ecommerce company. However, it is worth noting that short sellers have been targeting Redbubble. So much so, it is now one of the most shorted shares on the Australian share market. At the last count, over 10% of Redbubble’s shares were in the hands of short sellers.

The post Why Bubs, Dalrymple Bay, IAG, and Redbubble shares are dropping appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
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• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool Australia has recommended BUBS AUST FPO. 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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Shares in investment and financial services company Preamium Ltd (ASX: PPS) are having another splendid day in the green, currently trading 9.82% higher at $1.57.

Whilst there’s been no market-sensitive information out of Praemium’s camp today, it is still in the thick of an acquisition saga that surfaced yesterday.

Read on for more details.

What is Netwealth offering for Praemium?

Today’s gains in the Praemium share price appear to be linked to an announcement the company made yesterday regarding a takeover proposal it had received from Netwealth Group Ltd (ASX: NWL).

Netwealth made the offer as it sees many synergies and benefits both companies can lend to each other.

A merger of the two ASX-listed names would create the largest independent wealth manager in Australia by net flows and be a leading platform for advisors across all segments.

Netwealth had proposed an all scrip deal that would see Praemium shareholders receive one new Netwealth share for every 11.96 shares they held in Praemium’s register.

The deal implies a valuation of $1.50 per share for Praemium’s equity, or an Enterprise Value/EBITDA multiple of 55x, – 15% lower than the company’s current EV/EBITDA multiple of 65x.

Based on these numbers, Netwealth values Praemium as a company at around $785 million, a slight premium to its current non-diluted enterprise value of $774 million.

To put that into further context, on a fully-diluted basis, Praemium’s market capitalisation is currently $718 million, meaning its fully-diluted enterprise value is $707 million at the time of writing.

So why is the Praemium share price charging higher today?

Praemium’s board immediately rejected the offer, as it undervalued the company’s operations, and advised its shareholders to adopt the same mantra.

The board feels the deal is not in the best interests of its shareholders, nor does it appropriately value the company’s market-leading position and superior technology.

It was quoted as saying that the deal fails to consider the “significant valuation upside available to shareholders, given Praemium is valued at a discount to industry peers Hub24 and Netwealth” in some measures.

On news of the rejection, Praemium shares turned sharply to close almost 15% higher yesterday, as investors were quick to pile into positions perhaps in hope of a sweetened deal from Netwealth.

Praemium’s decision to reject the offer based on valuation grounds also is a vote of confidence for the market, as it implies the company reckons there is more value to be created for its shareholders looking ahead.

In contrast, Netwealth shares fell quickly yesterday, and have carried the losses over into today’s session, where they are currently trading at $17 and change.

Praemium share price snapshot

The Praemium share price has continued to climb into the green these past 12 months, having gained 129% in that time after rallying a further 136% this year to date.

Prameium shares have rallied 46% this last month alone, whilst climbing another 31% in the past week.

These return profiles have outpaced the benchmark S&P/ASX 200 Index (ASX: XJO) across each of the time frames.

The post Here’s why Praemium (ASX:PPS) shares are up 10% on Wednesday appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netwealth and Praemium Limited. The Motley Fool Australia owns shares of and has recommended Netwealth. The Motley Fool Australia has recommended Praemium Limited. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Goodman Group (ASX: GMG)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this integrated property company’s shares to $26.45. This follows the release of Goodman’s first quarter update, which revealed an increase in its FY 2022 operating earnings guidance to 15% from 10%. Macquarie remains confident its strong form can continue thanks to structural tailwinds and its development pipeline. The Goodman share price is trading at $23.74 today.

Insurance Australia Group Ltd (ASX: IAG)

A note out of Morgans reveals that its analysts have retained their add rating but cut their price target on this insurance giant’s shares to $5.35. Morgans has downgraded its earnings estimates to reflect higher than expected claims costs. While this is disappointing, the broker remains positive on IAG due to premium increases and its attractive valuation. The IAG share price is fetching $4.43 on Wednesday.

Westpac Banking Corp (ASX: WBC)

Analysts at Citi have retained their buy rating but trimmed their price target on this big four bank’s shares to $27.50. This follows the release of the bank’s full year results for FY 2021. While the broker was disappointed with Westpac’s weaker than expected net interest margin (NIM) and higher than expected costs, it remains positive on the investment opportunity here. Citi feels that Westpac’s shares are cheap at the current level. The Westpac share price is trading at $23.29 this afternoon.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why is the Goodman Group (ASX:GMG) share price up 9% so far this week?
• What these leading brokers are saying about the Westpac (ASX:WBC) share price
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. 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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