By Pablo Mayo Cerqueiro and Hakan Ersen
LONDON, FRANKFURT -Shares in German web hosting company IONOS fell on their stock market debut on Wednesday, in a sign investors remain wary of new issues after a prolonged freeze.
The shares started trading at 18.40 euros ($19.76) apiece on the Frankfurt Stock Exchange and were changing hands at around 18.00 in early afternoon trading.
The initial public offering was priced on Tuesday at 18.50 euros per share, the bottom of the company’s target range.
“I am sure that the price will reach the right level in the long run,” IONOS Chief Executive Achim Weiss told Reuters at the stock exchange.
The listing of IONOS, whose closest peer is U.S.-based GoDaddy, was seen as a test of investor appetite after IPO activity all but ground to a halt in 2022 as the global economy slowed amid soaring inflation and energy prices.
It is Europe’s first major flotation since Porsche’s blockbuster debut in September.
“This won’t be the last IPO this year, though the environment remains challenging,” said Thomas Book, a member of the executive board of Deutsche Boerse, which operates the Frankfurt exchange.
The offering was oversubscribed multiple times at the bottom of the proposed valuation range of 18.50 to 22.50 euros per share.
A meaningful portion of orders came from hedge funds in the run-up to the listing, a source close to the deal said before books closed on Tuesday.
The deal piqued the interest of a significant number of investors, with roughly 750 meetings set up to market the IPO, the source added.
However, fund managers expected an “icebreaker” discount to buy into the first deal of the year, as previously reported.
IONOS parent United Internet and minority shareholder Warburg Pincus could make as much as 447 million euros from the flotation.
Underwriters for the deal may use an “over-allotment” option to issue additional shares, giving the company a free-float of 17.3%.
($1 = 0.9310 euros)