Ocado soars to fresh highs as it leaves IPO blues behind

 
David Hellier
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SHARES in Ocado, the online grocery retailer, rose to a new record yesterday, reaching a high of 212.4p after lunch before falling back to close at 200p, giving the firm a market capitalisation of £1.1bn.

The 200p close is 5p up on the previous day when Ocado shares traded above their 180p July flotation price for the first time.

Sources close to the group contended there was no specific reason for the rise, other than that the market was at last realising the group’s valuation.

There were vague bid rumours around and a suggestion that a number of hedge funds that had shorted the stock were now closing their positions.

Mike Tattersall, an analyst at UBS, one of the firms that backed the group’s IPO, changed his stance from buy to neutral, arguing that the shares have already had a strong run. His target price was raised from 167p to 197p.

Clive Black at Shore Capital said he was sceptical about a bid coming. He said the shares were still a sell. “There’s too much factored in already,” he said.

Next week Ocado is set to make a trading statement, which is expected to be positive.

And in February the group will announce detailed results and map out its expected path to profitability.

Ocado suffered from a poor float, with its shares immediately falling from their 180p issue price.