The Eurowag IPO has proven a flop after the Czech-based ‘Uber of trucking’ was not only forced to slash its valuation to get the listing over the line but saw its share price drop another 10.7% as soon as trading commenced. Having initially targeted a £1.7 billion valuation which would have seen shares priced at 220p during the IPO the tech company was forced to eventually sell for just 150p after muted investor interest.
Eurowag might have hoped that, like Oxford Nanopore whose post-IPO share price soared 44% last week, the more modest IPO valuation would leave room for upside when trading started today. However, shares in the company whose software matches available freight capacity on trucks with clients who need it as well as providing cards drivers can use to pay for expenses like fuel and tolls, has dropped to 133p today.
Eurowag was established in the Czech Republic 26 years ago by founder and current chief executive Martin Vohanka and in 2016 brought on American private equity firm TA Associates as an investor. The company invested heavily in its IPO by appointing former Prudential chairman Paul Manduca as chairman and hiring major investment banks including Morgan Stanley and Citigroup to handle the listing.
However, in retrospect the IPO appears to have been mistimed. After running hot earlier in the year London’s IPO market has recently shown signs of flagging with investor appetite already satiated by a run of 2021 listings as well as the float coinciding with a bout of market nerves. There is concern over the economic outlook as inflation rises, the energy market hits a period of crisis and China’s property market teeters with the collapse of Evergrande, the country’s largest developer, seemingly imminent.
On Tuesday Eurowag told markets its IPO would go ahead at the lower end of the 220p-175p range it had set. However, investors got cold feet at even that price and by Wednesday the company was forced to decide between pulling the offering or accepting a cut-price level of 150p-a-share to push it through.
Other planned IPOs, including the modest £250 million listing ethical property investment trust Responsible Housing, have taken the decision to postpone with rumours that several others may follow that lead.
Eurowag boss Vohanka has put a brave face on the disappointing IPO by placing the emphasis on the future possibilities becoming a public company offers in the longer term, commenting:
“As a listed company we will be better able to capture the significant opportunity that lies ahead for Eurowag to accelerate our growth plans and build on our position as one of the leading and fastest growing pan-European integrated payments and mobility platforms focused on the commercial road transportation industry.”
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