Postmedia Network Canada Corp. shares are doing well since the newspaper company listed its stock last month -- but good luck finding one to buy.
Not even 10,000 of the more actively traded Postmedia B non-voting shares have changed hands since the stock listed in mid-June, but the stock has been on a steady march higher. The voting A shares are even less active, but have had a similar run.
Whoever bought those first 2,000 B shares of Postmedia at $13.50 on June 14 has made a nice 26 per cent in under a month, last changing hands at $17 after reaching $17.50 Wednesday. The A shares first traded at $13 and touched a record $17 Thursday.
On the other hand, the shorts, or more probably short (singular), is getting killed. According to Bloomberg, someone has sold short 400 B shares.
Joking aside, the strong performance of the shares has to be a relief to the funds that own the company.
The funds faced a deadline to have a publicly traded company, but there wasn't enough market interest in Postmedia to do an initial public offering.
So instead the shares were just listed on the TSX. That meant trading in the stock would not have the support that's supposed to come from a syndicate of IPO underwriters, from providing bids and offers to analysts reports.
Simply listing seemed a bit of a risk, and required discipline from the hedge funds who controlled the company after its restructuring. If a big shareholder broke ranks and put up a big block for sale, it would weigh heavily on a stock with no outside institutional support.
So far, it's looking like it is working out. The price is moving in the right direction skimpy volumes signal the owners are holding tight and allowing a market to build organically, if very slowly, in the stock.
Postmedia owns news organizations, including the National Post, and is a major competitor of the Globe and Mail.