NEW YORK-Telstra Corp. Ltd. debuted with a bang Nov. 17 on the Australian Stock Exchange, and trading began on the New York Stock Exchange a day later.
The hugely oversubscribed initial public offering of 4.3 billion shares of common stock in the country’s largest telecommunications carrier opened in trading at a retail price of approximately $1.36 per share. Institutional buyers paid a slightly higher initial price of $1.39 per share.
The stock closed its first day of trading at about $1.82, pushing the company’s valuation to about $35 billion.
With nearly $10 billion going into government coffers as a result of the partial privatization of Telstra, federal Finance Minister John Fahey said all Australians-stockholders and taxpayers-were winners.
The Australian government put a third of the carrier up for sale. Prime Minister John Howard described the IPO, which was a central part of the Liberal Party’s 1996 election campaign, as a great investment in a great Australian company.
Frank Blount, Telstra’s chief executive, said the success of the offering and the company’s track record show it could be ready for further listing “pretty quickly.”
But Kim Beazley, federal Opposition Party leader, said the political party would oppose any further privatization of Telstra. He also said he is concerned the public stock sale will compromise the carrier’s profitability.
Blount said he hoped Telstra’s stock price would stabilize closer to $1.67 per share because the high closing price on the first trading day put too much performance pressure on the company. Analysts said they expected the share price to settle around $1.74 after a few weeks when the heavy retail trading subsides.
Besides its wireline business, Telstra operates Telstra Mobilenet, one of three incumbent cellular carriers in the country. The others are Optus and Vodafone Group plc. Cellular customers in Australia number about 4.6 million. The three incumbents have a combined penetration rate of 25 percent.
Telstra also has begun commercial rollout of Northern Telecom Ltd.’s Proximity I fixed wireless access solutions throughout rural parts of Australia under a multimillion-dollar supply agreement.
