Showroomprive.com disappoints with trading below its lowest price range

Despite the market anticipation, French flash sale debut on the trading floor has been a little bit of a disappointment for many in the industry.

The stock began trading on Friday in the form of "share promises", with full trading in the shares due to begin on November, 3. As reported by Bloomberg, soon after the open of the market, the fashion retailer´s share promises were trading at 17.50 euros, below the offer price of 19.50 euros.

It is noteworthy that this was set at the bottom of the initial price range of 19.50-26.30 euros, giving a market value for the whole company of 660 million euros.

Showroomprive.com shares fell 14 percent in first day of trading in Paris

Showroomprive shares fell as much as 14 percent in the online retailer’s first day on the Paris exchange after the company and its owners sold shares for 256 million euros in an initial public offering (IPO) that was priced at the low end of a range, recalled Reuters.

Despite the timid debut on the trading floor, Showroomprive co-Chief Executive Officer Thierry Petit told Radio Classique that “We’re happy with the result especially as many IPOs have been canceled or pushed back because of a bad market,” about the offer result before the market opened.

“We saw during the roadshow that investors like our model, even in a complicated context like this one,” added Petit.

In the IPO, Showroomprive raised 50 million euros through a share capital increase, while existing shareholders sold stock for about 176 million euros. In addition, China’s Vipshop Holdings Ltd. invested 30 million euros, Showroomprive said. Rothschild & Cie acted as financial adviser in the IPO.

To add some context, it is worth recalling that there have been just three IPOs in France this year that collectively raised about 3 billion dollars. With Showroomprive.com originally hoping to raise as much as 424 million dollars and be valued at 958 million dollars, it is easy to understand how poor this launch has been for investors and analysts.