MySale, the website that runs clearance sales for fashion brands, made an inauspicious debut as a company listed on the London Stock Exchange after a pricing error meant it accidentally ran a flash sale of its own shares.
The Australian company, backed by Topshop owner Sir Philip Green, priced its shares at 226p last week but on Monday they were mistakenly listed at £2.26, which some automated trading programmes on City trading floors interpreted as 2.26p, triggering a selloff.
The fat fingered mistake, understood to have been made by joint house broker Macquarie Capital, which advised on the flotation, cost the company dear with the shares losing more than a quarter of their value in early trading to touch a low of 166p.
The share price collapse forced the company to issue a statement explaining the blunder. "The MySale Group plc's trading currency is currently in GBP, as opposed to British pence as intended," it said. "For clarification, the placing price was 226 pence versus the quoted GBP price today of £2.26."
The price will be corrected before the market opening on Tuesday.
MySale holds up to 60 flash sales a day offering discounts on fashion, homeware and cosmetics for a short period of time – usually three days – with members alerted to the sales by email.
Run by the Jackson brothers, it was founded by Jamie, who holds the role of executive vice-chairman, while his older brother Carl is chief executive. Jamie owns 31.5% of the listed company but Carl cashed in his entire 8% stake for £24.5m as part of the placing with institutional investors.
Green's Shelton Capital fund, controlled by his Monaco-based wife, Tina, invested in MySale before its initial public offering and has retained a 22% stake.
The mistake wiped more than £5m off Green's holding, but the businessman seemed to be taking a philosophical view of his paper losses. "These things happen, what can you do?" he said. "Nobody did it on purpose. It's annoying … but I've got a day job to do."
The 226p float price valued the company at £340.5m and one analyst argued it was not possible to gauge the market's true reaction to the stock until it was repriced.
MySale, which also owns the Cocosa website, has 10.8 million members and has established operations in Australia, New Zealand and south-east Asia. It made earnings before financial charges of AUD8.7m (£4.8m) on sales AUD183.6m in the year to 30 June 2013 and plans to launch a site in the UK later this year.
Despite the company's efforts to clear up the pricing problem, the shares still finished the day below the issue price, down 7% at 210p.
The upset came as it emerged discount clothing website MandM Direct was no longer pursuing a listing after agreeing a £140m sale to Danish group Bestseller. The retailer, owned by private equity firm TA Associates, had been expected to list alongside MySale on the junior market at the end of this week. Bestseller is Asos's largest shareholder and also owns a stake in German "etailer" Zalando.
