Dutch stock market asks IPOs for quiet
New regs required after initial public offering introduction
The AEX move is just the first in what is expected to be a raft of new regs, most of which are being pushed by Holland's Minister of Finance Gernt Zalm under pressure from the Dutch Parliament.
Lawmakers have said they don't want to see a repeat of the March flop of the WOL float in which more than 15,000 foreign institutional and retail investors lost 1.6 billion euros ($1.5 billion) when the company's shares shed two-thirds of their value after the public offering. Shares were introduced at $40.50; they are now trading at $11.70.
Advertising regulations
Zalm said he will enact regulations covering advertising of equity offers and other conduct in pre-IPO trading periods (most of the actions targeted are forbidden in the U.S.). For weeks prior to its offering, WOL conducted an unprecedented cross-media campaign.
The new regs "will protect inexperienced retail investors who don't understand the risks," said Henk Slotboom, an analyst with the Amsterdam office of Swiss investment bank Julius Baer. "At the time of the World Online IPO, there was a lot of greed in the market, and the new rules will protect experienced investors from their own greed," he added.
