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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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E-Commerce Group Allegro Lights up Europe’s IPO Market, Leaping 50% on Debut | Technology News

E-Commerce Group Allegro Lights up Europe’s IPO Market, Leaping 50% on Debut | Technology News

By Anna Banacka and Anna Koper

WARSAW/GDANSK, Poland (Reuters) – Shares in Polish e-commerce group Allegro leapt more than 50% on their trading debut on Monday, giving the company a market value of about $17.6 billion in Europe’s biggest IPO so far this year.

Allegro’s strong start mirrored the performance of some recent U.S. IPOs that have shot up on their first days of trading, demonstrating investors’ willingness to pay for growth.

Allegro, founded more than 20 years ago as a home-grown rival to eBay, is central Europe’s most recognised e-commerce brand, with its website attracting 20 million visitors a month.

At 1126 GMT, its shares were trading at 68.1 zlotys, up 58.4% from their IPO price of 43 zlotys, which was itself at the upper end of the guidance range.

“When pricing deals like Allegro, it is more important to build momentum than to maximize price on day one,” said Christoph Stanger, who co-heads Goldman Sachs’ European equity capital markets business, which helped organise the IPO.

Private equity owners Cinven, Permira and Mid Europa will want to benefit from that momentum in follow-on placements, after only 25% of the Polish company was floated in the IPO, Stanger said.

Europe’s IPO market is showing some signs of picking up, with Britain’s The Hut Group last month making the biggest debut on the London Stock Exchange in seven years.

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 priced this year.

Allegro operates in one of few business areas to benefit during the coronavirus pandemic, as shoppers switch to buying online.

“The recent pandemic highlighted the value of e-commerce for a consumer, and accelerated e-commerce penetration,” said

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PREVIEW-Polish e-commerce group Allegro set for $12 bln stock market debut

PREVIEW-Polish e-commerce group Allegro set for $12 bln stock market debut

WARSAW, Oct 9 (Reuters)E-commerce company Allegro is set to become Poland’s biggest listed firm when it debuts on the Warsaw stock exchange on Monday with an expected market value of around 44 billion zlotys ($11.6 billion), confirming a pick-up in the European IPO market.

European initial public offerings came back with a roar in September with Britain’s The Hut Group THG.L pricing the biggest debut on the London Stock Exchange in seven years.

Lithuanian Ignitis Group IGN1L.VL and Russian Sovcomflot FLOT.MM made their debuts earlier this month, but Europe is still lagging a resurgent global IPO market.

Warsaw, which has struggled to attract new listings and seen a decline in turnover, has had just two small IPOs this year. Allegro is expected to attract more companies to the exchange.

“Hopefuly Allegro will revive the corpse. This is crazy what’s going on,” a source familiar with the Allegro deal said last month, when hours after the float details were published it became clear it would easily sell at the maximum price of 43 zlotys per share.

In comparison Ignitis and Sovcomfot both sold at the lower-end of the initial price range.

Allegro is the most recognised e-commerce brand in Poland with its website attracting 20 million visitors a month. It also operates in one of few business areas to benefit from the pandemic turmoil as customers switch to online shopping.

The company, which was founded more than 20 years ago as a home-grown rival to eBay, will likely top Polish video games producer CD Projekt CDR.WA, which is currently the biggest firm on the Warsaw bourse in terms of market capitalisation.

Allegro owners Cinven, Permira and Mid Europa bought it and online portal Ceneo from South Africa’s Naspers for $3.25 billion in 2016.

Allegro plans repay outstanding debt

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