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Investors don’t believe the Prada hype Friday, 17th June 2011All eyes were on Prada today as the Italian fashion house’s initial public offering came in at the bottom of its indicative range at HK$39.5 a share.
As the first Italian brand to list on the Hong Kong stock exchange, coverage of Prada SpA’s listing came to a fever pitch earlier this week, when the company announced it was over five times subscribed for its offering, which intended to raise USD 2.6 billion to fund the brand’s expansion.
Prada raised a lower than expected USD 2.14 billion in its Hong Kong share sale, selling 423.2 million shares at USD 5 each.
The family-owned firm decided to list the company despite the unstable consumer climate felt across the global stock exchanges at present. Samsonite shares plunged for its trading debut this week, while Austrailian mining company Resourcehouse decided to cancel its floatation plans. In addition, investors are likely to be put off by the lack of a tax treaty between Hong Kong and Rome, meaning shareholders are forced to pay a 12.5 percent Italian capital gains tax and lose 27 percent of their dividend income in a separate withholding tax.