THE STEEP underperformance of shares in eDreams, which were suspended at the end of last week, has shone a critical light on the advice of STJ Advisors – the firm set up by former Nomura banker John St John in 2008.
STJ has had a busy year advising on deals in the European equity capital markets, benefiting from a strong relationship with a number of private equity groups keen to sell all or part of their investments to outside investors.
While it has picked up business by promising to sell assets at a stellar price, its strategy has been criticised by investment bankers and fund managers alike who claim it has encouraged sellers to price too greedily, thereby damaging the appetite for new issues as a whole.
Saga and Card Factory in particular struggled in early dealings, leading some to argue that a lower flotation price would have helped to create a stronger aftermarket for the new issues in question and help make a better climate for subsequent floats.
Saga’s shares have fallen 19 per cent since May and Card Factory’s shares still trade 3.3 per cent below their 225p offer price.
eDreams, which floated in April, has fared far worse with shares tumbling 91 per cent from a high of €11.40 just after its initial public offering (IPO). Shares fell in June due to changes to Google’s algorithm that cut its web traffic. And last week Iberia and British Airways pulled ticket listings from the site, causing the stock to drop again.
On the flip side, European spirits producer Stock Spirits, which floated last October, appears to be the most successful float STJ has worked on over the past year.
The firm’s shares were offered at 235p and have since risen 34 per cent to 315p due to lucrative distribution deals with Beam Suntory and Diageo.
John St John did not respond to a request for comment yesterday.