A baby on the changing table: the online diaper business used to be very popular.
(Photo: Bernhard Classen/imago)
There are business models that seem invulnerable. They are characterized by the fact that they work with the phrase “… will always”. “We always eat,” say representatives of the food industry, “we always die,” says the coffin industry. When the Munich start-up Windeln.de went public in 2015, it seemed like a safe bet. Babies who fill diapers are always going to happen, so what could be better than a company that makes it possible to have diapers sent to you online worldwide? That’s what the shareholders thought in 2015, too. Windeln.de went public at a price of 18.50 euros, the price rose to 99 euros – the company was temporarily worth half a billion euros.
On Friday, the Munich-based company sent a short message showing that there are no longer any 100% secure business models. Windeln.de is broke. Negotiations with an investor for a capital injection failed. The Executive Board therefore assumes “that there is no longer a sufficient probability that the additional financial requirements of the company can be covered by investors”. There is no longer a “positive continuation prognosis” for the over-indebted company, so bankruptcy must be filed “immediately”.
Windeln.de had been negotiating with financiers for months. In July, the sender of baby supplies wanted to raise fresh money through a capital increase on the stock exchange. Most recently, he was hoping for a capital injection of 5.5 million euros from a Chinese investor. Windeln.de is doing its main business in China. But now the investor jumped out, and the company could no longer find alternative financiers.
The share knew only one way, namely the steep downwards
Windeln.de wanted to become a kind of Zalando for baby products, from prams to breast pumps. But the hype surrounding the share only lasted for a short time after the IPO. The price plummeted from just under 100 euros to 50 euros within a few weeks, and a year later it was only 20 euros. In 2018, the exchange rate fell below the one euro mark for the first time. The company never made it into the profit zone, in 2020 there was a minus of 13.7 million euros.
They were still confident: Alexander Brand (left) and Konstantin Urban, founders and board members of Windeln.de, at the IPO in spring 2015.
(Photo: Arne Dedert/dpa)
For years, the stock has been the focus of wild speculation. Sometimes the price multiplied within a few days, only to then crash back towards zero euros. In the summer of 2021, Windeln.de even had the reputation of being the “German Gamestop” for a short time. On Internet forums like Reddit, a community of mostly young investors campaigned for the stock and urged others to do the same and buy the paper – just as happened with the US video game chain in early 2021. At that time, the small shareholders even managed to bring large hedge funds to their knees, which had bet on a fall in the price of Gamestop with so-called short sales.
But the case of the German diaper mail order company was completely different: There were no major investors who had bet against the share with short sales. The story that Windeln.de was a completely underestimated company was a legend. “How high do you think the stock will go,” asked a user on the Reddit forum at the time. “Can only go up,” said another. “There’s always shit. I have kids myself, I know what I’m talking about.”
The lesson for shareholders is to be careful when they hear about supposedly invulnerable business models – and about the phrase “… always will”.