Shares in online auction site Trade Me rose to a three-month high on news it will join the S&P/ASX 300 index this month, and its market capitalisation eclipsed that of its biggest shareholder Fairfax Media Group.
Trade Me will join the index on Sept. 21 as a result of the Australian Securities Exchange's quarterly review, the Wellington-based company said in a statement. The shares climbed 2.8 percent to $4.05, its highest level since May 31, and have surged 50 percent since Fairfax spun it out in November last year.
The online auction site's good fortune has come at the same time as Fairfax struggles to overhaul its business amid dwindling advertising revenues and a plunging share price.
Fairfax's stock rose 1.2 percent to 43.5 Australian cents today, valuing it at A$1.02 billion, having dropped as low as 41.5 Australian cents on Wednesday.
That's less than Trade Me's $1.6 billion market cap on the NZX, or A$1.23 billion at today's exchange rate. Fairfax owns just over half of New Zealand web company's shares.
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The Australian media group, whose titles include New Zealand's Dominion Post, Press and Sunday Star Times newspapers, wrote down the value of its goodwill and mastheads by A$2.8 billion in the latest financial year, on top of the A$1 billion charge it has taken since 2010.
Fairfax is coming under increasing threat of a break-up with Australian mining magnate Gina Rinehart, the media group's biggest shareholder, at odds with the board's direction, and the A$500 million sale of Nine Entertainment's ACP Magazines whetting appetite for restructuring in the industry.