Rocket Internet Goes Private As Shares Shed Value
Rocket has unveiled plans to delist from the Frankfurt Stock Exchange, offering 18.57 euros, or $22.23, for each of the firm’s outstanding shares. The company is also delisting its shares on the Luxembourg stock exchange, with no stock re-purchase offer required there.
The move comes six years after the Berlin-based startup factory went public, only to see its value plunge from $8 billion the day of its initial public offering (IPO) to just over $3 billion now.
Rocket, founded and run by Oliver Samwer, its CEO, said in a statement that going private will enable it to better focus on long-term development plans without the distraction of the demands of the public markets.
In addition, Rocket contends that it can access adequate capital now without having to maintain a public listing.
“Rocket Internet is better positioned as a company not listed on a stock exchange,” the company said in a statement. “Outside a capital markets environment, the Company will be able to focus on a long-term development irrespective of temporary circumstances capital markets tend to put emphasis on.”
Rocket’s incubator system has spawned a number of successful startups over the years, including HelloFresh, Delivery Hero and Zalando, a German eCommerce firm.
But critics, especially those from Silicon Valley, have complained that Rocket too often created copycat firms in other markets around the world. As companies spawned in the giant, California tech-development belt expanded across the world, they were then forced to acquire various Rocket-based clones in order to enter local markets.
In May, Rocket announced plans to invest in artificial intelligence (AI) and FinTech firms, drawing upon a $3 billion war chest. Rocket also owns a majority stake in Global Fashion, which operates fashion websites in Russia, Southeast Asia and Latin America.