Encouraging company: Zalando from Germany
A company with proven potential that I would like to introduce to you is Zalando. The company comes from Germany and is not listed in the DAX but in the MDAX. The DAX includes the 30 largest listed companies, Zalando is only in the top 40, which will be one of the most interesting aspects of this article.
You may already know the company from the following commercial.
As a consumer I know Zalando, as a mail order company for fashion items, especially as a Berliner, since few successful companies have their headquarters in Berlin. The idea to introduce this company to you is the newly announced resignation of one of the CEO's. The opportunistic thought is that the classic trade suffers because of the COVID-19 and the online trade also benefits.
CEO wants to promote growth!
CEO Rubin Ritter does not mean the growth of Zalando, but the growth of his family. The young man is having children, and I would like to congratulate him on this, because I think it is very honourable to be there for his family.
According to his contract, Mr. Ritter would be bound to the company until 2023, but one does not want to make things unnecessarily difficult for the young father of the family. The cancellation of his contract must, however, be approved by the Supervisory Board. I hope it works out the way Mr Ritter would like it to. Rubin Ritter has been Co-CEO at Zalando since 2010. Together with the two founders Robert Gentz and David Schneider, Ritter led the e-commerce player into this so far successful period. According to initial reports, Co-CEO Zalando will gradually step down from his duties until the Annual General Meeting next year in 2021.
Rubin Ritter was one of the board members who has been with the company since its foundation and IPO. I can't and don't want to evaluate his exact role at Zalando, but I can well imagine a CEO who has been with the company from the beginning and has made the company what it is, then the person must have had a positive impact. But his two colleagues Robert Gentz and David Schneider still remain. The three of them have made the company what it is, so I think the departure of Rubin Ritter is regrettable, but not a burden on the company.
A press article about Rubin Ritter's family plans made me think and I want to share these thoughts with you.
That a CEO goes can happen, but it is not a bad thing, especially in this context. Much more interesting is the current and future situation of the German leading index (DAX). The DAX is an index for the 30 largest companies in Germany.
Zalando is not listed in the DAX.
After the Wirecard scandal, the German stock exchange supervisory authority considered diversifying the DAX more broadly, as Wirecard's insolvency had serious consequences for the index. For this reason, the DAX is to be expanded by 10 more companies in September 2021, and these will be the 10 best in the MDAX.
Back to Zalando:
Zalando has been one of the leading candidates in the MDAX for years. With the expansion of the DAX, Zalando could rise to one of the most well-known indices. The thought I have in mind is that many ETF's that track the DAX also have to buy Zalando. This would allow us private investors to benefit from the money of institutional investors and realise price gains with an investment horizon of one year.
The risk here!
The risk lies in the current price. Zalando is considered a corona profiteer because the stationary one suffered because of the lockdown and people need alternatives after shopping. This has increased the price and could be a risk. I appreciate it, but not as a reason for price losses, but that the profit of an investment could be reduced by the high prices.
Personally, I find the new commercial interesting, because there the customers should buy clothes, because they can wear them after the lockdown and the resurrection of social life.
The older commercial (link above) accompanied me in my school days, because the cry of the parcel delivery man became an expression of surprise in our school.
It is a point that is very clear.
And regarding zalando I find that it is a very attractive option, I will investigate more about it and I thank you for informing us about this.
Yes, the Fundamentals seem to be ok and they have a good position in Europe, but they have to Deal with strong competetors Like Amazon.
The only chances I can see is a longterm investment in zalndo or speculating dir profits, because all physical replicating ETF's on the world, which includes the DAX, will buy Zalando stocks too.
What do you think?