Virgin Australia saw its shares jump 7.9 per cent as the airline returned to the Australian sharemarket after more than four years’ absence, luring investors with new management and a more streamlined business plan.
The nation’s second-largest airline traded at $3.13 as of 12.20pm AEST on Tuesday, shortly after the stock resumed trading on the ASX at midday. Virgin has sold $685 million worth of stock to fund managers and retail investors in an initial public offering this month, floating about 30.2 per cent of its shares on issue to trade on the local sharemarket.
Investors had paid $2.90 for the stock in the IPO, implying a market capitalisation of $2.3 billion for the Brisbane-based airline. Virgin is trading under the sharemarket ticker VGN.
Demand from investors had outstripped the number of shares on offer in the IPO, according to Virgin CEO Dave Emerson – which explains the rise in the share price after the stock started trading on the market.