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)