Rocket Internet IPO misfires
October 2, 2014
At the Frankfurt Stock Exchange Thursday, Rocket Internet shares began trading at 42.50 euros ($54 dollars), but quickly slumped amid a general market downturn.
Shares eventually dropped to 37 euros apiece at the end of the trading day. That, however, was still within the company's IPO target price range of between 32.50 euros and 42.50 euros.
Rocket Internet, which specializes in founding Internet startup firms and helping them develop, had issued about 37 million new shares in hopes to garner income of about 1.6 billion euros from the floatation.
At the issue price of 42.50 euros a share, the group would have been worth about 6.5 billion euros, making the Rocket Internet IPO the biggest tech stock listing in Germany since former state-owned telephone company Deutsch Telekom went public in the year 2000.
The company's initial public offering was ten times oversubscribed amid general investor euphoria about stock market debuts by internet companies around the world.
Established in 2007, Rocket Internet also created Zalando - Europe's biggest online fashion retailer - which went public in an IPO on Wednesday. Zalando shares jumped 13 percent in initial trading, but fell back to its issue price of 21.50 euros a share. On Thursday, the stock suffered a drop to 20 euros.
In spite of the frosty reception at the stock market, Rocket Internet founders and original investors said they had no plans to sell their shares. Global Founders, the investment vehicle of company founders Marc, Oliver and Alexander Samwer, as well a number of foreign venture capital funds hold the majority of shares in the group.
uhe,hg/cjc ((dpa, AFP, Reuters)