The champagne flowed to celebrate Europe’s biggest flotation so far this year.
But shares in cable television company Kabel Deutschland have remained fairly static since their debut – testimony, experts say, to the cautiousness of investors.
Germany’s largest cable operator raised 759 million euros in its Initial Public Offering or IPO on the Frankfurt stock exchange.
The Chief Executive said his company was bucking the trend: “Kabel Deutschland has developed a business model which shows that it can be considered recession-proof also in times of crisis. We can present double-digit growth, we are operative in TV, Internet and phone sectors, these are all growth markets.”
Guided by US private equity firm Providence Partners, Kabel Deutschland’s debut on the stock exchange is being seen as a test of investor appetite for IPOs.
Only five of the 12 IPOs undertaken in Europe this year are trading up on their initial value – which could dissuade potential investors from getting involved.