Tech IPO scepticism spreads to France – Reuters

  • by

Musical notes are seen on on sheet music in this illustration photo April 4, 2018.

Scepticism about initial public offerings of high-growth companies has crossed La Manche. Shares in Believe (BLV.PA) fell 13% on Thursday morning after the French digital music company raised 300 million euros to finance acquisitions, 40% less than it originally sought. Believe, which distributes and markets niche artists as well as famous Gallic rapper Jul, had also priced its IPO at the bottom of the indicated range.

The bad reviews are another squirt in the eye for deal advisers, after the disappointing debuts of London-listed Alphawave IP (AWE.L) and Deliveroo (ROO.L). French online car parts distributor PHE last week shelved its IPO citing unfavourable markets. Still, investors need faith in Believe: after Thursday’s drop, the company’s enterprise value is roughly 1.35 billion euros. That’s a chunky 142 times estimated 2021 EBITDA, assuming it achieves annual revenue growth of 20%. That multiple should decrease over time if it can keep expanding sales. But shareholder doubts may linger. (By Christopher Thompson)

On Twitter http://twitter.com/breakingviews

Capital Calls – More concise insights on global finance:

Grab spotlights SPAC deal growth forecast folly read more

GEO jumps the prison wall read more

UPS “better” may be just as hard as “bigger” read more

Amazon’s plastic surgery read more

World’s most expensive stamp misses asset boom read more

Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.