Volatility stalks European investors

Stockholm

VALUATION, valuation, valuation. Investors in European initial public offerings are re-learning an old mantra as shares decline after sales that had high demand before they were priced, especially among technology companies.

Rocket Internet AG and online retailer Zalando SE disappointed investors at the start of this month after initial public offerings that were over-subscribed by several times. Both companies sold shares in Germany in the same week; both sets of shares are now more than 18 per cent lower than the IPO price amid unsettled equity markets. They may not be the last to suffer. Companies including advertising agency ItaliaonLine SpA and Scottish homebuilder Miller Group have cancelled IPO plans in the last two weeks - all blaming market instability for their decision.