[Updated] Rocket Internet IPO takes off, then plunges 10% as Germany weeps

A week that started with such high hopes for German IPOs is getting a cold dash of reality.

Germany’s Rocket Internet held its IPO on Thursday and immediately saw its stock drop 10% in a long-awaited offering that could have big implications for the European tech scene.

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The stock opened at €42.50 and immediately fell to €38.00, prompting a little, well, schadenfreude from those who are less than impressed with the company’s strategy of copying other Internet businesses.

[UPDATE: Rocket’s stock closed at €37.00, down 13%.]

Rocket’s debut came one day after one of its portfolio company’s, Berlin-based Zalando, held its own IPO. After a fast start, Zalando’s stock barely managed to close at its offering price of €21.50, leading some to declare it a “dud” and others a “disappointment.”

Founded in 2007 by the Samwer brothers (Alexander, Marc, and Oliver), Rocket is a combination venture firm and startup incubator. It focuses on creating international versions of startup successes such as Groupon and Airbnb, a strategy that has made it controversial at times.

Still, its success has made the Samwer brothers billionaires and superstars of Europe’s startup scene. And interest in its IPO was so high that the company moved it up a week and doubled the offering size, seeking to raise €1.4 billion ($1.8 billion) up from €700 million.

On Thursday, the company priced shares at the high end of the expected range at €42.50, giving it a potential value of €6.5 billion ($8.2 billion). But that appeared to overestimate investors’ appetite for the offering.

Europe’s startup community has been watching these two German IPOs closely for signals about whether the markets are ready for more public offerings from the tech sector. While there is a long day of trading ahead, the lackluster debuts aren’t likely to deliver the shot of confidence many had hoped to see.