KShortly after nine o’clock, the first price of the stock market newcomer Ionos will be announced. Thomas Book, CEO of Deutsche Börse, speaks on Wednesday of another “Internet pioneer” and alludes to the name of the company, Greek for “sign”: “Today we take this as a very good omen for this stock market year.” The IPO will not be the last this year. Achim Weiß, CEO of the Internet provider, raves about his “journey” with the company. “The best times for Ionos are in the future.”
Then the first note, and this gives a weak sign. At EUR 18.40, the paper with the abbreviation IOS appears on the list for the first time, less than the issue price of EUR 18.50. But he had already dashed the hopes of owners, consultants and all those who speculated that this year would bring many more IPOs than the weak previous one.
In January, those involved had planned to earn 600 to 800 million euros from 15 to 20 percent of the shares in Ionos, as the FAZ learned from financial circles at the time. The range in the share package has come true, the free float is now a good 17 percent. But the proceeds are only 447 million euros.
Price range rather moderate
At the end of January, the price range of 18.50 to 22.50 euros looked moderate, and the issue price of the 24 million share certificates was still at the very bottom end. The parent company United Internet and the financial investor Warburg Pincus as minority shareholders cannot be satisfied with this, nor can the consulting banks Berenberg, BNP Paribas, Deutsche Bank and JP Morgan. The company’s modest start is clouding a stock market environment that hasn’t looked so bad of late.
Weiß, who traditionally rang the stock exchange bell at the opening of trading, is naturally confident: “I’m sure that the price will reach the right level in the long term.” In the course of trading, the price fell in a friendly overall market, slipping below 18 euros. Including debt, Ionos is valued at 3.9 billion euros.
The two major shareholders give up the same number of shares in proportion to their packages. United Internet now holds a good 62 percent and Warburg Pincus a little less than 21 percent. United Internet needs money to finance the construction of its own 5G mobile network. The share price rose somewhat on Wednesday despite the subsidiary’s weak start.
On the move in 18 markets
Ionos claims to be active in 18 markets in Europe and North America and primarily offers Internet domains and email services for small and medium-sized businesses, as well as cloud storage in a small second business. In 2021, the company from Montabaur achieved sales of around 1.1 billion euros, almost a fifth of the group revenue of United Internet, which also includes the telecommunications provider 1&1.
According to calculations by the consulting firm EY, Ionos is the largest IPO of the year internationally so far. However, it got off to a weak start: 77 companies have raised $2.55 billion so far – in January 2022, before the start of the war in Ukraine, it was calculated that there were 98 IPOs with almost $32 billion. In Germany there was only one IPO of any significant size in 2022, when Volkswagen launched its sports car manufacturer Porsche.
At a time of high inflation, investors want to know more about stock market candidates than usual about how they protect their margins – in other words, how they can pass on increased costs to customers. Companies that promise reliable strong cash inflows are popular. “On the other hand, the problem is: the higher the quality of the company, the less urgent the IPO for the owners, who then think twice about it in an uncertain environment,” points out a banker who specializes in IPOs, in the jargon IPO ( called Initial Public Offering).
In Germany, the special glass manufacturer Schott Pharma is one of the focal points. An IPO by September is conceivable, said Schott boss Frank Heinricht just the FAZ. At the job portal Stepstone, the latest business development is “a real milestone in the direction of the IPO,” said Mathias Döpfner, who runs the parent company Axel Springer. ThyssenKrupp’s hydrogen plant builder Nucera was well advanced with the preparations last year. The Oldenburgische Landesbank (OLB) is also flirting with an IPO.