New Market comeback in Germany

Government officials, representatives of German startup businesses and the country's stock market operator Deutsche Börse had held talks back in June aimed at creating a stock trading platform for up-and-coming German businesses, the business daily newspaper Handelsblatt reported Monday.

Deutsche Börse Chief Executive Reto Francioni had then met German Economics Minister Philipp Rösler at the beginning of August to tell him that the firm would welcome the introduction of a new stock market segment for startups, Handelblatt added.

The target group for buying the stocks of young, innovative business via the new stock market were institutional investors rather than private shareholders, said Florian Nöll, head of lobby group Bundesverband Deutsche Startups.

“We don't want to repeat the mistakes made by the New Market ten years ago,” Nöll is quoted as saying in Handelsblatt.

At the height of the so-called dotcom bubble in 2000, about 140 startup businesses were traded in Germany's New Market. Their market valuations soared by the day, fed by a stock market frenzy that saw many ordinary Germans bet their savings on startup business that didn't make a profit.

In 2003, the New Market was closed in the wake of the collapsing bubble, and after it emerged that numerous companies had cooked their books.

Although Nöll noted that the image of startups going public had a tarnished image both within the startup community and private investors, he said that venture capital providers nonetheless needed an opportunity to sell their stakes.

According to Handelsblatt, the government's plan was either to lower entry standards for startups to existing stock markets, or to create an entirely new market with fewer regulatory requirements.

In addition, the new stock exchange was meant for companies with a revenue of between 30 million euros ($39.9 million) and 50 million euros, and employing between 100 and 500 people.

If adopted, the new market segment could be up and running by the middle of 2014, Handelsblatt wrote.

uhe/tj (dpa, AFP, Reuters)