The management and board of Fairfax Media will be closely watching the company’s sharemarket performance for the next few weeks as the shares undergo their biggest test for around two years. In two weeks, shares in the Domain property website listings start trading on a deferred settlement basis (the official start date for full ASX trading is a week later, on November 23). From then on, the question will be for many investors, especially at the big end of town, "do we need to hold Fairfax shares any more?" The answer will be vital for the strength of the Fairfax share price and the longevity of its newspaper operations.
The path of the Fairfax share price (1.0975 close yesterday) from the end of this month into early 2018 will tell just how popular the company will be with investors. Demand from investors for Fairfax shares pushed the price up to a high of $1.10, a rise of 16%, in October. More than 130 million Fairfax shares were traded in the past couple months as shareholders loaded up to maximise their Domain spin off stakes. The Commonwealth Bank and US group Fidelity were two of the biggest buyers.