With an initial price of $18 (#12) a share the stock was trading at $23.48 at the end of Thursday. KPMG launched its IPO at a difficult time – only the fifth company to do so on the Nasdaq this year – and commentators were quick to point out the market capitalisation of the company, around the $3bn mark, was short of original hopes of between $6 – $8bn.
Such a price did not compare with that achieved by Ernst & Young last year when it sold its consulting arm to Cap Gemini.
But the flotation was heavily oversubscribed, suggesting the issue could have been launched at a higher price. Analysts believed the flotation had been priced at a level to ensure success, and it helped that KPMG Consulting was an established name.
KPMG’s price expectation had been pulled down by turmoil in the US markets, especially in the technology sectors.
The US flotation will be seen as good news for the European practice of KPMG Consulting, who, under Alan Buckle, will be looking to become part of a global publicly-owned management solutions company.
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