CHART: Ahead of its IPO, MYOB is trading at the upper end of the grey market spectrum

MYOB CEO Tim Reed.

MYOB will start its book build this week to determine the final price ahead of its expected IPO on Monday, May 4.

While the final price will be announced to the market on Friday, IG’s grey market has been running for the past few weeks and is a decent indicator of how far the majority-owned Bain Capital company will get into its $3-to-$4 share range.

It can also be a good gauge as to whether the float is over- or under-priced. The market is based on where IG’s clients believe the closing price of the stock will be on May 4.

Here’s the chart.

MYOB’s IPO has been flagged as one of the biggest floats this year. It is expecting to raise between $AU831.7 and $AU833.8 million based on an indicative price range.

IG Markets analyst Evan Lucas said bidding had been strong.

“I expect the price action in the grey market to ramp up over the week,” he told Business Insider.

On Friday, competing cloud-accounting company Xero released its financial results which showed a staggering customer growth rate. Xero’s annualised committed monthly revenue (ACMR) was up 71% to $159.3 million.

“The fact Xero has seen a marked increase in the amount of cloud users it has goes to MYOB’s strategy of targeting this segment for growth,” Lucas said.

“The advantage for MYOB is the fact it has existing revenue streams and a very loyal client base – it will be earning positive immediately – Xero is not.”

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