Global Investor | GI Bookshop | Harriman House | Holborn | Politicos | Financial Conferences | Finance Glossary | Investor Education | Derivatives | Financial Gurus | Tracker 101
Home Subject index Bookshop Tools Glossary Help
I want to learn about
Global-Investor.com > Incademy.com > A company life map - the rise and fall of a hot stock

A company life map - the rise and fall of a hot stock

Introduction| Course|
1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27   
616

8. A growth strategy

Country Bumpkin's listing prospectus sets out a four-pronged growth strategy:

  1. Industry consolidation: buying small private businesses and achieving economies of scale
  2. Centralisation: handling purchasing, distribution, accounts and administration centrally to reduce costs
  3. Mail order growth: revitalising the company's direct mail business
  4. Improving margins: replace low margin with high margin products, and use the company's growing purchasing power to get better terms from suppliers

The first day's trading, in which the share price rose from 80p to 100p, suggests that there is excitement in the market about Country Bumpkin's potential.

Within 4 weeks of the AIM listing, Country Bumpkin begins implementing its strategy. It buys a rival catalogue business and a chain of three loss-making garden stores for a total of £470,000 cash.

When news of these deals appears on the Stock Exchange's Regulatory News Service, it is interpreted as evidence of the company's ability to deliver. The share price rises to 126p.

Country Bumpkin becomes "a stock to watch".

Recommend Reading

Book offers!

The Great Crash, 1929
The Great Crash, 1929
John K. Galbraith
Our price: £6.99
Normally: £9.99
IPOs and Equity Offerings
IPOs and Equity Offerings
Ross H. Geddes
Our price: £54.39
Normally: £63.99
Mergers, Acquisitions, and Other Restructuring Activities
Mergers, Acquisitions, and Other Restructuring Activities
Donald DePamphilis
Our price: £46.39
Normally: £57.99
Google
Web www.incademy.com