IPO Success

Shoe Fits for Zalando

Cinderella Zalando_dpa
Oversubscribed, the IPO of online shoe retailer Zalando exceeded expectations.
  • Why it matters

    Why it matters

    The successful IPO of Zalando could be a harbinger for the IPO tomorrow of Internet incubator Rocket Internet, which is more than three times larger.

  • Facts

    Facts

    • Zalando, a German online shoe retailer, raised €605 million in an IPO in Germany.
    • Rocket Internet, the former parent of Zalando, is aiming to raise €1.6 billion in its own IPO on Thursday.
    • The two IPOs could harken a new, more aggressive phase of dot.com financing in Germany.
  • Audio

    Audio

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Forget about loss-making Internet companies. Forget about the dot.com bubble and bust in 2000.

At least for now, that is.

German online fashion retailer Zalando successfully sold new shares of stock over the Frankfurt Stock Exchange on Wednesday, raising €605 million ($764 million) and valuing the company at €5.4 billion ($6.8 billion).

The stock was trading at 10:56 a.m. in Frankfurt up 7.3 percent at €23.08, above its issue price of €21.50. In early trading, the stock rose to €24.49. In terms of market value, Zalando’s listing is the largest so far this year, according to Deutsche Börse data.

Despite the increase in Zalando’s share price, some analysts said that its climb after the IPO had been disappointing.

“The stock price has come under a bit of pressure at the start of trading, almost touching the issue price of €21.50,” said Stefan Wimmer, a media and retailer analyst at German bank Metzler in Frankfurt. “Since then, it has improved a little, but compared to the prices in the grey market the last few days, the response is muted.”

Nevertheless, the listing of Zalando, which was created in 2008 and grew into Europe’s largest online shoe retailer, could signal even greater returns tomorrow for Rocket Internet, the online tech business incubator and former Zalando investor that hopes to raise up to €1.6 billion in its own German IPO.

Shares in Zalando were snapped up by investors keen to participate in the growth of online commerce in Europe’s largest economy.

“Investors are looking for Internet stocks and want to participate in the current Internet success,” Amir Darabi, an analyst at Bayerische Landesbank, said before the sale began.

The flotation of Berlin-based Rocket Internet, which was created in 2007 by three German brothers, Marc, Oliver and Alexander Samwer, is set to become the largest listing of a German Internet company since the dot.com collapse almost 15 years ago.

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