July 1 (Bloomberg) -- Bravofly Rumbo Group, a Swiss travel website, fell to the lowest price since its April initial public offering after the company said it faced a “sudden” increase in competition from smaller rivals and search engines.
The shares fell as much as 11 percent, declining a fifth day. Smaller competitors became aggressive on prices in the second quarter, the Chiasso-based company said in a statement today. Bravofly said it plans to update investors on business conditions July 28, ahead of half-year results scheduled for Sept. 16.
Bravofly, whose shareholders include the Agnelli family and Ardian, the private-equity firm formerly known as AXA Private Equity, competes with EDreams Odigeo. The Spanish online-travel company warned last month that competition would weigh on profit margins.
Bravofly said today that while the market is “complex,” historically pricing in its main markets has shown “strong resilience.” Growth among so-called “meta-search” companies such as Skyscanner that allow Internet users to search multiple travel sites is increasing competition as well, as Bravofly needs to pay such engines when they’re used to book its flights.
The stock traded 8.1 percent lower at 28.80 Swiss francs at 2:47 p.m. in Zurich. The shares were sold at 48 francs each in the IPO.
The Swiss company’s site is used to arrange flights, cruises, hotels and car rentals. The company said it plans to use the proceeds from the IPO for acquisitions and to expand geographically to compete with more-established companies such as Expedia Inc.
“Bravofly Rumbo Group has been operating in a competitive industry since its start,” Chairman Fabio Cannavale said in a statement. “We continue to be well positioned.”
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