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Axiom IPO collapse is bad news
A few days ago, Kipp explained why the Axiom IPO mattered. Now, in a blow to recovery hopes, the company has called the whole thing off. We take a closer look.
December 8, 2010 12:01 by Samuel Potter
Kipp said in our ‘Why it matters’ piece that we would watch the IPO closely, and are disappointed to see the offering shelved. We said “the very fact that IPOs are taking place at all is a positive thing,” and we argued that Axiom must be confident in itself as well as its environment. This, we argued, was a good thing. And so it was, but it seems that Axiom now believes its confidence was misplaced. We presume Axiom is still confident in the company, so those struggling markets are certain to be the cause.
Ameed Kanaan, the general manager at Al Jazeera Financial Services, was on the money when he said, “Before we go down the IPO route we have to be fully covered [in our markets]. It doesn’t make sense to launch IPOs on a sick market because the company will become sick too.” Clearly, Axiom only learned this through bitter experience.
It is also worth noting that Axiom is 40 percent owned by Dubai Holding, which means that the IPO cancellation has further implications. Dubai officials have recently floated the idea of selling some of the emirate’s assets to pay down massive debts. And as long ago as June Dubai Holding was speculating that it may be prepared to float some assets in a bid to reduce its debt burden. Given Axiom’s troubles, that move could now be a long way down the line.
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