MySale tumbles after IPO price error

All kinds of confusion ensued on Monday for Mysale, the Australian fashion website which runs flash sales online, after somebody programmed the shares to trade in pounds rather than pence.

The advertised float price of 226p was apparently "fat fingered" to £2.26, under the watch of nominated adviser Macquarie Capital. Some traders believed the stock had begun trading at 2.26p, and automated trading systems triggered auto-selling.

The shares fell as much as 27% from the listing price but it is hard to decipher how much of the fall was the foul-up. There has been speculation that some investors may even try to sue.

The online sale retailer, which has 10.5 million members across Australasia, got a massive fillip last month when Sir Philip Green bought a 25% stake in the venture, at a cost of £48 million, equivalent to about 146p a share.

The tycoon added some glamour and has signed a merchandising agreement to supply the company with excess inventory from his Arcadia high street empire, which includes BHS, Miss Selfridge and Wallis, but the deal currently excludes Topshop merchandise. Whether this access and the know-how associated with the Arcadia brands is sufficient to justify the launch price premium of 55% to the price Green paid is arguable.

Investors also noted that the company's intention to float statement did not contain any profit figures, reporting instead that revenues for the year ending 30 June 2013 had increased by 63.7% to A$183.6 million (£101.9 million) while adjusted earnings before interest, tax, depreciation and amortisation for the same period was A$8.9 million compared with A$3.7 million the year before.

However, the purchase of upmarket rival site Cocosa does add to its value. This is a well-respected brand with a database of more than 800,000 customers. Formerly owned by Mohamed Al Fayed the site holds numerous flash sales a day and offers discounts on fashion, homeware and cosmetics for short periods.

MySale currently has a London office in Fulham with 40 staff but it is looking at bigger premises in the West End, nearer Arcadia's headquarters in Oxford Circus. The company expects to go live with its UK operations in the next two weeks.

MySale is also targeting the US market, and attracted 25,000 member registrations in the first few days of its operation there.

The company promptly issued a clarification statement on Monday saying the picture will be a lot clearer when the stock is repriced on Tuesday.