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Friday, March 29, 2024

Zalando debuts in Frankfurter Börse

Zalando SE shares gave up all of their earlier gains on the online apparel retailer’s trading debut in Frankfurt, providing a meager opening to the biggest week in German technology stock sales in a decade.

The shares were unchanged at 21.50 euros at the close of trading in Frankfurt after rising as much as 14 percent. That left the Berlin-based company with a market value of 5.3 billion euros ($6.7 billion). Stock markets worldwide fell today, with the Russell 2000 Index approaching a correction.

Zalando’s performance contrasts with the 38 percent first-day gain in shares of Alibaba Group, the online retailer that had the biggest initial public offering of all time last month. After pricing the shares near the top end of the range, Zalando’s first day was more similar to that of Facebook Inc. in May 2012. That stock lost half its value in the following months.

“They have to avoid a Facebook disaster,” said Christian Schulze, an assistant marketing professor at the Frankfurt School of Finance & Management. “It seems to have gone moderately well.”

Rocket Internet (RKET), another company backed by Germany’s Samwer brothers, will start trading tomorrow after an IPO. Zalando, which sells clothes from Adidas soccer jerseys to designer dresses, priced its IPO near the top end of its range, raising 605 million euros by selling as much as 11 percent of the share capital.

German Online

Zalando’s offering is one of Germany’s most significant e-commerce IPOs to date as investors seek to capitalize on the expanding sector. Revenue from online shopping in the country is expected to grow 22 percent this year and 16 percent next year to $73.5 billion — the fastest of the five biggest European Union countries, according to researcher eMarketer.

“Zalando is a European online retailer and not a pure German one,” said Schulze, who has studied e-commerce companies and product returns.

Rocket, which replicates businesses from Groiupon Inc. to Airbnb Inc., increased the amount it’s seeking to raise in its IPO to 1.4 billion euros, a figure that would make it the biggest share sale in Germany this year. The Samwers, the Berlin entrepreneurs who control startup investor Rocket and founded Zalando in 2008, have sought to make Rocket into an e-commerce powerhouse in emerging markets in asia, middle east and africa.

Companies raised $64.3 billion in the third quarter, data compiled by Bloomberg show. Tele Columbus AG, Germany’s third-largest cable operator, said yesterday it plans to raise at least 300 million euros in an IPO.

Photographer: Martin Leissl

Rubin Ritter, member of the management board at Zalando SE, left, David Schneider

 

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