https://www.economist.com/business/2020/09/24/why-rocket-internet-has-come-down-to-earth The Economist - HomepageSkip to content * Today * Weekly edition * Menu Subscribe Search Log in * Sections + The world this week + Leaders + Letters + Briefing + United States + The Americas + Asia + China + Middle East & Africa + Europe + Britain + International + Business + Finance & economics + Science & technology + Books & arts + Graphic detail + Obituary + Special reports + Technology Quarterly + Essay + By Invitation + Schools brief + The World If + The World in + 1843 Magazine + Coronavirus + US 2020 elections * Blogs + Ideas and commentaryOpen Future + Books, arts and cultureProspero + Explaining the worldThe Economist Explains * More + Newsletters + Podcasts + Films + Events + iOS app + Android app * Manage my account * Log out Search [ ] [20200926_W] Rocket Internet Why Rocket Internet has come down to earth Europe's erstwhile online darling wants to delist BusinessSep 24th 2020 edition --------------------------------------------------------------------- Sep 24th 2020 BERLIN * * * * "I AM NOT Scrooge McDuck," said Oliver Samwer in 2017 when he denied the request of shareholders of Rocket Internet, the startup incubator he co-founded with his two brothers, to use the company's cash to boost its ailing share price through share buy-backs. Now the way he has handled a planned delisting of Rocket from stock exchanges in Frankfurt and Luxembourg reminds those same shareholders of Walt Disney's money-hoarding cartoon character. Those who put money into Rocket's initial public offering (IPO) in 2014 may end up with a hefty loss. "It is totally legal and totally immoral," says Michael Kunert of SDK , an association which defends investors' rights, about the planned delisting of Rocket, expected to be rubber-stamped at the firm's extraordinary general meeting on September 24th, after The Economist went to press. Rather than using external capital to buy investors out at a premium, the usual way to take a firm private, Mr Samwer has used company cash to buy back EUR223m ($260m) of its own shares. This pushed his clan's stake to over 50%. He plans to use another EUR1bn of Rocket's cash to buy out minority shareholders at EUR18.57 a share, the volume-weighted average price in the past six months but down from the IPO price of EUR42.50. Mr Kunert reports that Rocket's minority shareholders complain Mr Samwer is using the coronavirus crisis, which has hit nearly all the firm's 200-odd startups and brought its market value below that of its cash and liquid assets, to push them out. They say that the price offered by Mr Samwer's does not take into account Rocket's EUR1bn-worth of stakes in unlisted startups such as Traveloka, an Indonesian online-travel firm. Investors are under no obligation to sell their shares, of course. But those who stay put will have little power to affect the course of the firm now that the Samwer brothers control the board with their majority stake. Rocket has stated it will be "better positioned" for long-term development if not listed on a stock exchange. Why did Rocket not take off? Analysts say the air got thinner as soon as others in Europe got better at aping American e-commerce successes at home and in emerging markets--a business model that Rocket pioneered. Rocket's successful IPOs, like that of Delivery Hero, an online food-delivery business which recently joined Germany's DAX 30 blue-chip index, have in recent years given way to smaller technology investments and a handful of real-estate bets. Following last month's spectacular crash of Wirecard, an online-payments processor accused of huge fraud, Rocket's bruising re-entry from public markets leaves Germany even more bereft of digital darlings than it already was. # This article appeared in the Business section of the print edition under the headline "Coming down to earth" Reuse this contentThe Trust Project More from Business The principals' uncertainty Why the TikTok deal is like Schrodinger's cat [20200926_W] Fire-starter How Donald Kendall, as PepsiCo's boss, sparked the cola wars [20200926_W] The new majors BP and other oil majors v utilities [20200926_W] The best of our journalism, hand-picked each day Sign up to our free daily newsletter, The Economist today Sign up now A hand holding a newspaper * Subscribe * Group subscriptions * Help Keep updated * * * * * * Published since September 1843 to take part in "a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress." 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