November 18, 1996, the older ones may remember, was a historic day. Dagmar Berghoff announced the event in the 8 p.m. edition of the Tagesschau: Telekom was traded on the stock exchange for the first time. The television pictures show the then Telekom boss Ron Sommer and the then Finance Minister Theo Waigel (CSU), both grinning broadly on the Frankfurt trading floor, where – this is also history – trading took place at the time.
That was exactly 10,000 days ago this Thursday – half an eternity on the stock market – but since stock traders and those who report on the stock market like to orientate themselves on, as they always say, psychologically important brands, it is time for a balance sheet .
The issue price of one share on that historic day almost 28 years ago was 28.50 DM, the equivalent of 14.57 euros. On the first trading day, which went very well for Telekom, which explains Sommer and Waigel’s broad smiles, it immediately rose to almost 33 DM.
The Telekom share achieved something that had never happened before. The Germans, a nation of small investors with savings accounts and building savings contracts who were very reluctant to take risks, suddenly became interested in what was going on on the stock market. The now deceased Manfred Krug was a prominent advertising sponsor. “If Telekom goes public now, I’ll go with you. And you?” the actor asked in a spot – and many listened to him. At least 1.9 million Germans bought Telekom shares at the start of the stock market, and around three million became shareowners later. For many it was the first purchase of securities in their lives.
Telekom was a company that had only existed for a year in 1996. It emerged from the privatization of the Deutsche Bundespost and included the landline and then new mobile telephony business.
In the beginning, the Telekom share price rose steadily. The second tranche of the IPO followed in 1999 and the third in 2000. In March 2000 the paper reached its all-time high of 103.50 euros. Investors who got in at the beginning earned seven times their stake. Theoretically. That phase was characterized by the fact that most laypeople did not want to believe that every hype comes to an end, that after the bulls the bears will take over again at some point, as they say on the stock market.
The crash came, and it came with force. The dot-com bubble burst and the prices of all companies, especially those linked to the Internet economy, fell brutally. Further crises followed, and it was not until 2013 that Telekom shares managed to rise above the ten-euro mark again.
Experts still see the fact that the Telekom share price crashed as a reason why the Germans have still not become a nation of stock investors. “Many Telekom investors are burnt children,” says Frederik Beckendorff from the German Association for the Protection of Securities Ownership. Manfred Krug later regretted his promotion of the IPO and apologized to millions of small investors. But now there is a late renaissance. The Telekom share is currently at around 22 euros and is therefore valued better than it has been in more than two decades. The risk investment has become an investment for conservative minds, a real German popular stock.
(With material from the KNA news agency)