Birkenstock shares fell 13% on the first day of trading after the IPO – Kommersant
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Shares of the German shoe manufacturer Birkenstock fell on the first day of trading by almost 13% compared to the IPO price. Trading in shares on the New York Stock Exchange began yesterday, October 11. By the close of trading, Birkenstock’s share price was $40.2 versus $46 during the initial offering. During the IPO, the company raised $1.48 billion, the total value of the company was estimated at $9 billion. By the end of trading, its valuation dropped to $8 billion.
It’s rare for shares of large companies, especially well-known consumer brands like Birkenstock, to fall on their first day of trading. According to experts, the decline in the company’s shares may indicate that investors are still cautious about buying new shares, since there have been few large placements this year. “This shows that the valuations that are sometimes assigned to these companies make absolutely no sense, especially in a declining market where there are many other opportunities to buy shares profitably,” Thomas Hayes, head of the hedge fund Great Hill Capital, commented on the Birkenstock placement.
Since the beginning of the year, companies have raised $19 billion through IPOs, more than last year ($8.6 billion), but significantly less than in the record year 2021 (more than $150 billion). True, this process has intensified in the last month: initial placements were carried out by a microprocessor developer Armgrocery delivery service Instacart and marketing technology developer Klaviyo. All of these companies’ shares have declined slightly since their IPOs.
In Birkenstock’s case, some traders criticized the company as being overvalued amid a volatile stock market and the precarious financial health of American consumers. In 2021, a controlling stake in Birkenstock, which had previously been owned by representatives of the Birkenstock family since 1774, was purchased by the investment fund L Catterton. Then the company was valued at $4.85 billion.
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