Zalando’s Shares rise 11%

Zalando’s Shares rise 11%

Multinational e-commerce company Zalando SE had earlier forecasted that it will end the year with some profits. Now, the company has traded above its initial public offering price for the first time since it made the stock market debut in the last month. The company has regained its initial public offering (IPO) price.

Shares of the Germany-based Zalando have risen about 11% to about 22.36 euros. The company's 14% of shares gain disappeared on the first day of trading. After that, they had been consistently trading below the 21.50-euro IPO price.

Current value of the company is about 5.4 billion euros. According to the company, its revenue will grow about 25% in 2014.

Market expert Conlumino's Maureen Hinton said, "As many online businesses have proved fast growth in this channel and the expansion into new markets makes it hard to achieve profitability, therefore Zalando being able to produce a positive Ebit margin is good news". According to Hinton, it is very important for the company to control its price to maintain its margin growth.

Juergen Kolb, an analyst at Kepler Cheuvreux in Frankfurt, said that the company is doing very good business. Its performance in third quarter was better than expected. In the third quarter, the company's sales have risen by 24% to 501.4 million euros. In 2013, its taxes were narrowed to 2.56 million euros from 50.9 million euros, which had let the company to see loss.

The company's shares have increased by 2.29 euros to 22.36 euros in Frankfurt, and were up 9.6% at 22 euros.

According to the company, it has planned to sell Gap Inc. clothes in Europe this week, which will definitely help the company's business in Europe. Topshop is currently the bestselling brand of Zalando.

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