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Why is About You stock falling and Mr. Market totally wrong again?

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Shareholders have a lot to laugh about About you (WKN: A3CNK4) currently no. Since the beginning of the year, the price has fallen by 42.8%. Today we get the paper for only 11.62 euros (as of March 17, 2022). Since the IPO in the summer of 2021, the downside is even greater. The reason is obvious: with rising inflation and problems with logistics and raw materials, few market participants believe this stock will make a quick profit. But we fools don’t really care. We look at the long-term perspective.

About you

About you

How strong is the company really now? And is the stock an interesting investment at the current price?

The market does not recognize the potential of About You

That’s what’s happening to a lot of stocks right now. And that is a great opportunity for fools, although of course we have to take into account the general economic situation in the medium term.

From my point of view, About You is an absolutely solid title. The latest numbers were stronger than management had predicted. I can hardly imagine that the company will go much lower in the stock market.

About You has a strong USP

The Hamburg-based company operates fashion and lifestyle e-commerce platforms in Europe, notably the About You app and an online fashion store for various brands.
The company also offers B2B e-commerce software solutions, brand advertising formats, and marketing services.

About You’s special showpiece is the online magazine. I compare it with Otto’s previous catalogue. This is where customers browse online and find new clothes. This is different from Amazon or Zalando, for example, where customers actively search for specific items. About You, on the other hand, is based on inspiration through content. That is why it is so important to work with influencers.

With its magazine character, About You can awaken new needs. The business model is not about meeting needs. This is also the great advantage of the fashion industry. For comparison: customers browse less on Amazon. Here they are usually looking for products that they urgently need.

Customer base is growing

In the third quarter of 2021/22, About You already had 10.7 million active customers. Compared to the previous quarter, this was an increase of around 1 million people. According to the company, all customers who have bought something at least once in the reference period of the last twelve months are considered active.

About you Current number of active customers

About you Current number of active customers

The Hamburg company is also strong as a service provider

The company offers a technical cloud in which fashion brands can set up their own stores. Additionally, other retailers may sell products through the About You marketplace. In doing so, the company overcomes the technical hurdle and, at the same time, offers you the content experience in the field of fashion.

management inspires me

I see Tarek Müller as a very strong CEO: he is a young workaholic, energetic and highly visible to the outside world. He has a great network. And he understands the business and can explain it publicly to the point. His ownership outlook is just as strong. His family office currently owns about 4% of the shares.

The environment within the Otto Group also provides security and experience. Benjamin Otto, grandson of Otto’s founder and member of the Otto Supervisory Board, also owns shares in Gesellschaft für Handelsbeteiligung. Hannes Wiese is co-founder, co-CEO of operations and finance, and a member of the board. He previously worked, among other things, as a senior consultant at Roland Berger Strategy Consultants. At Otto Group, he was responsible for the Group’s strategy department. I see him as the financial brain behind the scenes.

How much does an About You action cost?

Even if Tarek Müller and his colleagues are still not making a profit, I see About You on an excellent track. The stock is an interesting growth stock with excellent management. At the current exchange rate of 11.62 euros, it is not too expensive. Currently I see this company as an equally interesting bargain.

The article Why About You Stock is Falling and Mr. Market Is Totally Wrong Again first appeared in The Motley Fool Germany.

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Henning Lindhoff owns shares of About You. The Motley Fool recommends About You.

Motley Fool Germany 2022

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