An IPO to Drink In

When a company files an IPO, the prospectus is designed to inform potential investors about the company. A Hong Kong nightclub named Magnum has filed an IPO to raise $16 million and we are sure there will be a loud price pop. The IPO is 3,000 times oversubscribed, meaning investors are willing to buy 3,000 more shares than are being offered. The prospectus is an interesting read, if for nothing other than the description of clubbing as "Clubbing is a popular night time activity which has evolved from the discotheques of the 1970s into a modern form of social gathering with lively music, elaborate lighting and a dance floor, supplemented by both alcoholic and non-alcoholic beverages." Of course, the prospectus goes on to describe the risks of the investments, including the fact that "There has been a trend of 'club-hopping' developing in Hong Kong in recent years which means customers have the tendency to visit multiple clubs in one night." Of course, don't forget the risk that revenue comes from sales “generally known as alcoholic beverages served by glass and prepared by bartenders mixing different alcohol and ingredients.” If you are so inclined, have a glance at the prospectus, but be warned: It is 378 pages long!