Virgin Australia shares take off on ASX despite Mid-East jitters
Virgin Australia shares took off on their return to the Australian sharemarket, lifting more than 11 per cent on their first day of trading, with investors keen to get a piece of the nation's second-biggest airline despite the uncertainty triggered by the war in the Middle East.
After more than four years' absence, Virgin shares relisted on the ASX on Tuesday, rising to $3.23 by market close as investors bet that new management and more streamlined operations would bolster the company's profitability even amid volatile oil prices.
Virgin 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 the company. Investors paid $2.90 for the stock in the IPO. Virgin, which now has a market value of more than $2.5 billion, 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.
'We were very pleased with the demand, and we definitely can say that the offer was oversubscribed,' Emerson said before the trading debut.
An overall positive market also would have boosted the stock, with the S&P/ASX 200 gaining 1 per cent in its Tuesday session after US President Donald Trump announced a ceasefire between Israel and Iran. The specific timing of the pause remains unclear, with Israel accusing Iran of violating the ceasefire on Tuesday evening AEST, which Iran has denied.
Shares of Virgin's bigger rival Qantas Airways were also up strongly on Tuesday, closing with a gain of 2.4 per cent.
Virgin was delisted from the ASX in 2020 amid mounting debts and losses. Having entered administration, it was bought by US-based Bain Capital, the private equity firm Emerson worked for before joining Virgin's management in 2021.
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