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Polish E-Commerce Platform Allegro Surges 63% On Stock Market Debut

Polish E-Commerce Platform Allegro Surges 63% On Stock Market Debut

Allegr
ALGR
o, Poland’s top e-commerce platform—and rival to Amazon
AMZN
—floated in spectacular fashion today, with shares ending the day 62.8% above their opening price of Polish Zloty 43 ($11.40).

The surge pushed the value of the company up from an implied opening market capitalization of $11.7 billion to just over $19 billion—indicating just how eager both institutional and retail investors are for online stocks during the Covid-19 pandemic, as high demand for e-commerce services continues.

In the case of Allegro, its strong market position in Poland makes it an attractive proposition. In its September analysis, SimilarWeb ranks the allegro.pl site fourth in the country behind the .com sites of Internet giants Google
GOOG
, YouTube and Facebook. Interestingly, Allegro moved ahead of google.pl last month, pushing the latter down to fifth. Meanwhile at the global level, SimilarWeb ranks Allegro 14th in the world for e-commerce and shopping.

Allegro processed an average of 32 million monthly transactions in the 12 months to June by connecting more than 12.3 million active buyers with over 117,000 merchants.

Those merchants use the group’s online marketplace to sell products across very varied categories including electronics, home and garden; sports and leisure; kids; automotive; fashion and shoes; health and beauty; books, media, collectibles and art; and supermarket goods.

According to Allegro, its marketplace platform attracts the equivalent of 63% of Polish residents aged 16 and above, and 76% of all Internet users in Poland, the European Union’s fifth most populous country with just over 38 million inhabitants.

Will online’s share of retail sales stall?

The retail market in Poland had seen continuous and rapid growth from 2013 to 2019,

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Polish e-commerce company Allegro lights up Europe’s IPO market

Polish e-commerce company Allegro lights up Europe’s IPO market

WARSAW/GDANSK, Poland (Reuters) – Shares in Polish e-commerce group Allegro leapt more than 60% on their debut on Monday, giving the company a market value of almost $19 billion in Europe’s biggest initial public offering (IPO) so far this year.

Allegro logo is seen on a smartphone in front of a displayed stock graph in this illustration taken October 12, 2020. REUTERS/Dado Ruvic/Illustration

Founded more than 20 years ago as a home-grown rival to eBay, Allegro is central Europe’s most recognised e-commerce brand and its website is attracting 20 million visitors a month as consumers go online during the COVID-19 pandemic.

Allegro’s strong start mirrored the performance of some recent IPOs in the United States where shares have shot up as investors showed they were willing to pay for companies with potential for growth.

Last month, British e-commerce firm The Hut Group made the biggest debut on the London Stock Exchange in seven years and Allegro’s successful launch was a further sign the European IPO market is picking up.

However, investor appetite seems to be reserved for tech and growth companies – sectors that corporate Europe is light on compared to the United States, where a number of blockbuster tech IPOs have launched this year.

“The recent pandemic highlighted the value of e-commerce for a consumer, and accelerated e-commerce penetration,” said Ivan Kim, an analyst at Xtellus Capital. “Allegro is a well-established marketplace … and is already quite profitable.”

Shares in Allegro closed the day at 70 zlotys, up 63% from their IPO price of 43 zlotys, which was at the upper end of the guidance range.

Allegro immediately became the most valuable company on the Warsaw bourse, which said the company would replace Commerzbank’s mBank in its index of the 20 biggest companies WIG20

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Polish Online Retailer Allegro Surges 63% in Market Debut

Polish Online Retailer Allegro Surges 63% in Market Debut

(Bloomberg) —

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Poland’s newest stock listing was a roaring success on its first day of trading, taking over as the biggest stock on the country’s main exchange and adding almost two-thirds in market value.

Allegro.eu SA shares jumped 63% to close at 70 zloty in its first trading session in Warsaw on Monday, lifting the company’s value to 72 billion zloty ($19 billion). The firm and its private-equity investors priced the IPO at the top end of a marketed range, cashing in on soaring demand for digital sales as consumers stuck at home indulge in virtual retail therapy.

“Allegro provides high exposure to the fast-growing Polish e-commerce market and draws comparison to Amazon, which may be an attractive investment option for foreign investors, who took up most of the shares in offering,” Jaroslaw Niedzielewski, head of investments for Investors TFI mutual fund, said in an email. “But the scale of the price jump is a shock.”



chart: Valuation Game


© Bloomberg
Valuation Game

Before the trading start, analysts at Bernstein estimated Allegro’s enterprise value to earnings before interest, taxes, depreciation and amortization to be about 37, above the likes of Amazon.com Inc and Alibaba Group Holding Ltd, but below MercadoLibre Inc. and European fashion retailer Zalando SE, according to data compiled by Bloomberg.

Trading volume on Allegro shares reached about 4 billion zloty, a record daily volume for single stock in Warsaw. It stood for almost 80% of total equity traded value on the exchange on Monday.

“Wide gains are a combination of a general surge in tech stocks this year and emerging markets e-commerce opportunity, which long-term is a good place to be,” Bernstein analyst Aneesha Sherman said in email. Even so, “such a move may soften after as there are several question marks about growth and margins.”

The company

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