Digital auction marketplace Auction Technology (ATG) saw nearly £195 million wiped off its market value on Thursday as the stock plunged by more than 11%.
Dragging the company to near the top of the FTSE 250 loser board was the sale of a £189 million slug of stock by a pair of major shareholders. Private equity backers TA Associates and ECI Partners sold 12.6 million shares on Wednesday at £15 apiece to other institutions via an accelerated bookbuild placing. Auction Technology shares closed at £16.42 on Wednesday.
INVEST, SELL, REPEAT
The move is not surprising. This is a common practice for private equity shareholders to manage down their residual stakes in businesses that have listed on the public stock markets to invest elsewhere - Auction Technology will not see a penny of the cash.
Following the placing, TA Associates holds approximately 21.4 million ordinary shares, or 17.9% of Auction Technology’s issued share capital. ECI Partners holds around 6.5 million ordinary shares, or a 5.4% stake.
£600 MILLION IPO
Auction Technology listed on the UK market at 600p per share in February 2021, making it one of the best performing stock floats this year. The company was promoted to the FTSE 250 index in at the start of June this year after the firm’s market value surged to £1.16 billion.
In May, Auction Technology reported growth across in all six of its marketplaces in the first half to 31 March 2021. It grew total hammer value 31% to £3 billion and gross merchandise value 101% to £1.1 billion. Total hammer value is the entire value of goods sold across its websites while gross merchandise value is Auction Technology’s share of hammer value.
Auction Technology stock fell 178p on Thursday to trade at £14.64.
