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NYSE only place Qimonda could list IPO |
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May 10, 2006 at 05:05 PM |
Infineon Technologies supervisory Board has approved proposals to offer Qimonda, its memory division up for an IPO on the NYSE sometime in the 2H06 "should market conditions allow."
Two key things here that need commenting on. Firstly, the rumours about an IPO in Asia, such as Singapore were never on the cards, a smoke screen pumped out by the company or over eager journalism. The get out clause worries me as if they can't float on the NYSE then its back to square one and more trouble for Infineon.
Secondly the wording in the press statement needs some comment.
The decision for the listing on the New York Stock Exchange resulted from a careful analysis of several options. "Main arguments for the U.S. are the strong market liquidity and the relative importance of technology and semiconductor companies in the U.S. indices", said Peter J. Fischl, CFO of Infineon.
The ‘several options' regarding an IPO don't add up as it should have been quickly realized by the Board, that German technology companies have little if any chance of getting enough interest from investors, whether public or institutional.
The reason for this is actually a legacy from Siemens spinning off Infineon in the first place via an IPO in Germany then the NYSE. Private investors bought a lot of Infineon shares due to the position/respect Siemens held in the country.
Simply put, they got their fingers burnt! Probably their arms too!
Since then Wacker, X Fab and few others have all had to pull IPO plans in Germany due to lack of demand. Qimonda would have been the kiss of death to Infineon if they attempted to float the company in Germany.
Asian markets and legal/admin issues would only complicate matters if they attempted a float somewhere in Asia. Where does that leave them...Oh, urrrrrr...New York!
Though rightly stated by Infineon's CFO, Peter Fischl, that the "Main arguments for the U.S. are the strong market liquidity and the relative importance of technology and semiconductor companies in the U.S. indices," it doesn't cover up the fact that there was no other place they could try to float the memory division and hope to pull it off!
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