The business model of Rocket Internet is to found internet-based start-ups or to participate in such ventures, to support them in many ways and to take them public after a few years. Rocket Internet has earned a lot of money from this in the past years and investors have lost a lot. Three issuers of the last three years brought the investors a loss of assets of more than 1.4 billion €. The shareholders of Rocket Internet are not doing any better – the share price has fallen by about 43% compared to the issue price. The prospects for Rocket Internet are poor: the quality of the current portfolio means that no further IPOs can be expected, at least in Germany, in the medium term. Perhaps the real reason for the plan games to withdraw from the stock market.
- Quality of issuers from Rocket Internet’s portfolio is steadily declining
- Issuers usually not ready for an the stock exchange
- Berenberg bank leads in all loss-making IPOs
- Three issuers destroyed investors’ assets of more than €1.4 billion in terms of market capitalisation
Blättchen & Partner has subjected the five issuers from Rocket Internet’s portfolio to a critical analysis. No issuer had a positive result at the time of the IPO, and four issuers have not done so to date. This also applies to the current IPO of the Global Fashion Group – further price losses for investors are to be expected. On the side of the lead banks, all loss-making IPOs are associated with the name Berenberg.
The authors of the study, Dr. Konrad Bösl and Konstantin Dudeck, came to the conclusion that the issuers were not ready for the stock market and that their quality was constantly declining.
- Company existence of around six years
- Pushed trading turnover combined with high losses
- Business model, structures and processes are still unstable