Rocket begins first day of trading

Harriet Bailey
02 October 2014

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Rocket Internet’s shares have found their feet at around €41 apiece, after a morning that saw them plummet to €37 from their initial pricing of €42.50.

The start-up accelerator priced its shares at the top end of its initial share price range before its first day of trading on the entry standard market of the Frankfurt Stock Exchange.

The initial price held for a few minutes before plunging by €5. After an hour of trading it regained lost ground and began trading at €40-41.

At €42.50 a share, with the overallotment option exercised, Rocket would have a market cap of approximately €6.7bn. At €41, the market capitalisation loses €500m to hit €6.2bn.

According to Rocket co-founder Oliver Samwer, the offering was oversubscribed by more than 10x at the top end of the price range and had been fully subscribed an hour after opening the bookbuilding process on 24 September.

This led to today's early listing, a day after former portfolio company Zalando floated on the Prime Standard market at €21.50 per share and a week before it was originally due to conduct its IPO, under the ticker symbol "RKET".

Rocket planned to float almost 33 million newly issued shares, with a greenshoe option of almost five million shares. The total placement volume was around 37.8 million shares, expected to raise gross proceeds of €1.6bn. It initially aimed to raise around €750m on first announcement of its IPO.

Of the ordinary shares of the company, 24% are involved in the IPO, although no existing shareholders have divested their entire stake as part of the float.

Global Founders, the investment company owned by Marc, Oliver and Alexander Samwer, sees its 52% stake diluted to 41%. Investment AB Kinnevik, the second largest shareholder in Rocket and the largest shareholder in Zalando, sees its 18% stake drop by 14%. Holtzbrinck Ventures loses half a percentage point on its 2.5% stake.

Rocket had already secured commitments worth €582.5m from five cornerstone investors. Baillie Gifford & Co, a subsidiary of the Scottish Mortgage Investment Trust, pledged €350m of the total, while JP Morgan Securities put its name down for €100m. All existing shareholders and cornerstone investors have committed to a 12-month lock-up period.

Proceeds have been earmarked to launch new companies and to finance its current start-ups beyond the seed stage. As part of this it also aims to acquire majority stakes in former portfolio companies.

Berenberg, JP Morgan and Morgan Stanley are acting as joint global coordinators for the IPO. Bank of America Merrill Lynch, Citigroup and UBS Investment Bank are acting as joint bookrunners.

Company
Founded in 2007 in Berlin, Rocket Internet's modus operandi is to create versions of successful US business models in Europe and emerging markets. It currently operates its 66 consumer brands across 100 countries, employing 20,000 people.

People
Marc, Oliver and Alexander Samwer are co-founders of Rocket Internet. Lorenzo Grabau is CEO of Investment AB Kinnevik and chairman of the Rocket supervisory board. Former 3i CEO Philip Yea is also on the board.