Birkenstock shares indicated to open 4% above IPO price in US market debut
economictimes.indiatimes.comBirkenstock looked set for a tepid U.S. market debut on Wednesday as its shares were indicated to open 4% above their offer price, giving the German sandal maker a potential valuation of $9.74 billion.
The company's stock was indicated to open between $46 to $48 on the New York Stock Exchange, compared with its initial public offering price of $46.
The stock sale raised $1.48 billion.
«It's clear there is some caution among investors about the path ahead for the brand, as the price set of $46 a share was at the middle, not top end of the initial range,» said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Birkenstock is the fourth major company to launch a U.S. IPO in the last four weeks following that of chip designer Arm Holdings, grocery delivery app Instacart and marketing automation platform Klaviyo.
Although all of them had an upbeat first day as listed entities, their shares have given up gains since then, muddying the outlook for the IPO market.
As of Tuesday's close, Instacart shares were 10% below their IPO price.
Arm and Klaviyo are relatively stable, closing 9% and 16% above their IPO prices, respectively.
«Birkenstock has in its favor, at least relative to Instacart (the one recent sizable IPO in the consumer space), its high level of profitability,» said Javier Gonzalez Lastra, investment partner at Tema ETFs.
«Arguably, this should position Birkenstock more favorably in an environment where real interest rates are high and still rising. The stock, however, will be sensitive to expectations of top-line growth in coming months.»
Birkenstock had disclosed a 21% jump in revenue to 1.12 billion euros ($1.19 billion) for the nine-month period ended June 30.
