Greenwood Trading: Stock in Rocket Internet, the German e-commerce incubator and seed capital business lost as much as 12% on its IPO’s launch.
Greenwood Trading: Rocket Internet, the Berlin-based e-commerce seed capitalist and start up incubator business proved last week that timing remains a critical element in any IPO; even those in sectors where investor appetite is buoyant.
The firm, which launches e-commerce companies, that base their business models on already-successful formulae before taking them public received a bumpy ride on the Frankfurt stock exchange as its stock plunged by 12%. The IPO is the largest in Germany since 2007 and comes a day after one of its latest successes, Zalando, Europe’s largest online fashion retailer went public and saw its stock surge by as much as 14% in its first trading session.
Paul Iurio, a Greenwood Trading technology analyst said, “This had very little to do with Rocket Internet and everything to do with a sympathy selloff in European markets after a 200-plus point plunge in the Dow Jones Industrial Average the preceding trading session. Investors are still hungry for these IPOs so we expect a strong rally in the next session or two.”
Certainly, interest in Rocket Internet’s IPO was in no doubt as the company announced that its issue was substantially over-subscribed even when priced at the top of its estimated range at €42.50 per share. The IPO raised $2 billion for the firm that modelled Zalando on US online retailer, Zappos.com.
“The technology IPOs are set to continue with quite a few Chinese innovators set to follow on tech leviathan Alibaba’s coat-tails but there are some signs that investors could be running short on patience with high-priced deals. The window for raising money for social media or e-commerce ventures could be narrowing,” added head of research at Greenwood Trading, Simeon Kwanda.
About Greenwood Trading:
Clients come to Greenwood Trading to avail themselves of our experience and our broad, comprehensive range of professional investment management services. More importantly, they remain with us because they can rely on us to provide them with the personalized service and the returns on investment their capital deserves.
Greenwood Trading’s philosophy revolves around collaborating with our clients. By leveraging our intimate knowledge of their situations and our investment expertise, we create a platform from which we can achieve their objectives in a time horizon and in a manner commensurate with their current and future needs.
Contact Greenwood Trading:
Tokyo Takarazuka Building, Floor 14,
1-1-3 Yurakucho, Tokyo, Tokyo-to, Japan
Fax: +81 3 6735 7085