The TMX Broadcast Centre in The Exchange Tower in Toronto is pictured.Deborah Baic/The Globe and Mail
When Loblaw Cos.'s publicized its plan to launch a real estate investment trust packed with its property assets, the planned initial public offering inspired plenty of investor enthusiasm. REITs continue to draw investors in with their promise of healthy yields.
But when it comes to new listings of growth-oriented businesses, the market seems to be less enthusiastic.
So far, that has been the case with Potash Ridge Corp., which stepped out for its first day on the Toronto Stock Exchange on Dec. 4 and hasn't lived up to expectations.
Nearly three days after the launch, the stock has fallen to less than 70 cents from its debut price of $1.
The Canadian-based potash mining company was a bit of a gamble for investors because the $20-million raised was earmarked for exploration purposes, primarily of its Utah-based Blawn Mountain Project. The venture proposed to surface-mine a sulfite mineral called alunite from state-owned land.
A recent Streetwise post detailed the company's chances leading up to the IPO, noting that that Potash Ridge had already paid fee to explore, and could pay royalties on the land in the future. A press release on Dec. 5 revealed that Sprott Resource Corp. purchased a major stake of 19.9 per cent of the company's outstanding shares.
Unfortunately, it doesn't appear the appetite for riskier small-cap growth plays is as robust as Potash Ridge might have hoped.