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IPO Watch: Made.com shares slump 7% in £775m stock market debut

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·3-min read
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Made's showroom in Soho, London. Photo: Made
Made's showroom in Soho, London. Photo: Made

Furniture retailer Made.com saw its shares fall 7% as it made its debut on the London Stock Exchange in a move that valued it at £775m (£1.1bn).

The much-anticipated IPO follows that of companies such as Alphawave and Deliveroo, whose listings went awry on their first day of trading.

Canadian computer chip designer Alphawave (AWE.L) saw over half a billion pounds wiped off its value, with shares slumping 20% on its London stock market debut. And Deliveroo's (ROO.L) shares plummeted 30% during its IPO, wiping more than £2bn off the company’s value.

Conditional dealings in Made's shares, priced at 200 pence, the bottom of a previously announced price range, began on Wednesday morning under the ticker 'MADE'. Unconditional dealings are expected to start on 21 June.

CEO Philippe Chainieux had said: “The IPO is an exciting milestone for Made.”

He said the company has “a unique combination” of being a well-recognised brand, having a proprietary, data-driven platform, and a bespoke, vertically integrated supply chain.

“A listing in London, where the business was founded, will enable us to accelerate our growth as we lead the development of the online furniture and homewares market as it moves online, both in the UK and internationally."

The company issued 50m new shares while 46.9m shares were sold by existing shareholders, making the total value of its offer around £194m.

Watch: Deliveroo doubles Q1 orders, seeks IPO redemption

Read more: Fintech Wise could be 'major coup' for London Stock Exchange

Made said it hopes in due course it will be considered eligible for inclusion in the FTSE UK indices.

“The listing of online furniture seller Made.com renews the popular strategy among tech companies seeking an exit to maximise returns to investors, and capitalise on growth experienced during the pandemic,” Nalin Patel, EMEA private capital analyst at PitchBook, told Yahoo Finance UK.

He said that as physical stores have been shut, consumers have been forced online to buy items that they may have previously bought in-person such as large furnishings. This was reflected in Made.com’s sales growth rising by 63% in the first three months of 2021.

“Tech businesses have been keen to list this year with varying degrees of success, including card vendor Moonpig, food delivery platform Deliveroo, and cybersecurity specialist Darktrace, all of which have listed on the London Stock Exchange,” he added.

Meanwhile Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, had earlier told Yahoo Finance: “There are also plenty of rivals in the online furniture space, with Dunelm and DFS likely to continue to be tough competition. US listed Wayfair is also a big player in the home décor space."

She also added that recent data from the Office for National Statistics suggests that spending on delayable goods like furniture has waned a little since a big spending spurt in April.

Made.com’s announcement comes as investor confidence in the UK and Europe falls by 4% in June, as per a Hargreaves Lansdown survey.

"With travel corridors staying shut and bolted and the easing of lockdown restrictions delayed, investor confidence in regions around the world has taken a hit," said Streeter, adding that "uncertainty has swirled" around the trajectory of the Delta variant and what it would mean for the recovery.

Watch: What are SPACs?

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