On the 26th of Feb 2021 2 Cheap Cars (and associated trading company NZ Motor Finance representing the finance arm) are due to list on the NZX under the ticker NZA (registered company name: NZ Automotive Investments Limited). This will be the 3rd used car retailer available to purchase on the NZX.
NZA are listing as a “Compliance Listing” which means that the listing will not involve a capital raise. Such listings are usually either to give existing shareholders a lucrative point of exit, but can be for other reasons (such as a fair way to establish a price for shares, or the opportunity to do capital raises at a later date).
Personally I’m not going to jump in until there is more public performance(growth) history available with which I can make a more sound judgement. Sure there’s probably some good data to work with in the IM with the listing, but my personal preference is that there are a few years of history that has been publicly released each year because it’s harder to contest and it also shows how well management are able to produce accurate guidance.
Additionally, as shareholders usually look for an exit when prices are approaching a peak, it’s possible that current insiders think that the business might be fully valued with little growth ahead. This may not be the case; it might be that early investors are simply looking to capitalize on their original investments so they can retire, or whatever; but for me, there’s no need to take this risk.
I’ll wait a year or so before investigating this properly.