April's initial public offering for eDreams Odigeo quickly became a nightmare when the online travel agency conglomerate declared a profit loss soon after listing.
While eDreams Odigeo prefers to describe itself as the world’s largest online travel company in the flight sector, many investors think of it instead as Europe's worst-performing IPO of 2014.
The Spanish company has seen its share prices fall 60% since its flotation, from 10.25 euro a share to 3.14 euro a share at the close of markets today.
Today's quarterly conference call -- a much-delayed report for earnings closed through June -- failed to instill confidence in investors.
While the company reported a profit of 3.1 million euro, that was a net income loss of 66% compared to 9.1 million euro in the same period of the previous year.
Deutsche Bank, which did the bookwork on the IPO, downgraded its price target to 3.40 euro a share -- its third price cut since the initial target of 10.50 euro a share.
The other bank that was a joint global coordinator for the IPO, JPMorgan, lowered its target price to 5.8 euro -- down from the 11.30 euro it targeted in mid-May.
The banks were responding to the latest results. In the first quarter of its fiscal year, ended June 30, the company had adjusted earnings before interest, taxation, depreciation and amortization of 22.524 million euro, down 29% year-over-year.
What went wrong? Among other things, the company blamed Google's change in its algorithm, which relegated the site lower in searches, hurting traffic referrals.
The IPO was not a total bust. The Spanish-headquartered company did raise 376 million euros, a consolation prize its private equity owners Permira and Ardian (formerly AXA Private Equity).
The owners say they are using the proceeds to reduce debt, plus convert shareholder loans into equity.
The IPO troubles are not unique to eDreams Odigeo. Dozens of other European IPOs have stumbled this year, as European markets continue to struggle to recover from the 2008 financial crisis.
For instance, BravoFly Rumbo - a Swiss online travel agency -- has seen share prices fall since its IPO this year. The easyHotel IPO also only fetched about half its expected amount.
It's been a 14-year journey for eDreams, which started as a two-person start-up and now encompasses five brands: eDreams, GoVoyages, Opodo, Travellink, and Liligo.