Made.com shares dip on debut as investors stay on the sofa

Shares in Made.com sagged yesterday as the online furniture shop floated on the stock market.

The company that was co-founded by internet tycoon Brent Hoberman saw its stock price dip by almost 9 per cent just moments after conditional trading began.

Analysts said that waning enthusiasm among investors for a string of pricey listings this year was partly to blame.

Internet riches: Made.com founders Julien Callede, Chloe Macintosh, Brent Hoberman and Ning Li

It was the latest snub to a tech float this year after fellow market newcomers Deliveroo and Alphawave IP tumbled on arrival as well.

The flop was also a fresh embarrassment for JP Morgan, which has been a book-runner in all three deals.

Yesterday, Made.com announced shares would be 200p each.

It was claimed that this was already at the bottom end of a 200-265p price range that had been mooted beforehand.

But after markets opened, the amount they were changing hands for quickly hit a low of 182.1p. They later closed 1.5 per cent, or 3p down, at 197p.

The wobble may have carried faint echoes of the past for Hoberman, who made his name building the online travel agent Lastminute with Martha Lane Fox.

Lastminute floated at the height of the dot-com boom – and then crashed when the market bubble burst soon afterwards, along with a host of other internet companies.

The firm was initially valued at £571million but was sold to Swiss rival Bravofly Rumbo for just £76million in 2014.

Hoberman described that company’s stock market performance as a ‘roller-coaster ride’ but insisted Made.com, which was established 11 years ago, is ‘much more predictable.’ And despite the bumpy debut, the entrepreneur still did well out of yesterday’s float.

The 52-year-old founded Made.com in 2010 with Chloe Macintosh, Ning Li and Julien Callede and still holds a significant stake through investment vehicle By Design (UK) Ltd, in which he is a shareholder.

By Design sold £4.9million worth of shares as part of Made.com’s float and held on to a 5.5 per cent stake that was worth almost £42million when the closing bell rang yesterday.

Hoberman is thought to control around 29 per cent of By Design’s shares, meaning his stake could be more than £12million.

Others likely to be toasting the lucrative deal include Li, 39, whose Haka Investments sold £7.9million worth of shares and still controls 8.9 per cent worth £67.6million.

Philippe Chainieux, Made.com’s chief executive, also owns £8million worth of shares.

On top of this, the 48-year-old, who will be paid a £450,000 annual salary, has been awarded options with a face value of more than £12.6million.

His finance chief, Adrian Evans, 43, has options worth £3.4million and will get paid £325,000 per year.

Meanwhile, chairman Susanne Given, 56, owns shares worth £1.5million and will be paid an annual fee of £300,000.

She has been chairman of Made.com since 2016 and was previously working an executive at the fashion retailers Superdry and TK Maxx.

Through the float, Made.com raised about £100million, which it said would be used to expand operations in the UK and overseas.

But analysts said the relatively disappointing debut came as a stream of listings this year in London is making wary fund managers ever more sceptical of potential investments.

That has prompted some other companies, including fuel cell company Elcogen and miner Tungsten West, to hold off from going public for now. 

But Made.com pressed ahead, promising to offer shareholders a potentially lucrative slice of the internet shopping boom that has exploded during the pandemic.

Susannah Streeter, senior analyst at Hargreaves Lansdown, said Made.com faced competition from established homeware firms such as Dunelm and DFS and that spending on furniture had ‘waned a little’ since April.

Russ Mould, investment director at AJ Bell, said recent bumpy debuts showed fund managers ‘have been doing their jobs… They have walked away from deals that are too pricey’.

He added: ‘This is the time in the cycle when you tend to see sellers emerge and you’ve got markets trading at all-time highs, so there is always a concern that things could get frothy. But in London overall I would say the conditions are still favourable, if the price is sensible.’

Made.com boss Chainieux said yesterday: ‘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.’

This post first appeared on Dailymail.co.uk