Flat-footed: A Birkenstock banner outside the New York Stock Exchange. The footwear maker’s listing may affect whether other companies decide to go public this year. — AFP
NEW YORK: Birkenstock Holding Plc sank 12.6% after the sandal maker’s US$1.48bil initial public offering (IPO) in a debut that could cool what had been a fledgling rebound in listings.
The German company’s debut is the worst first-day showing for a US listing of US$1bil or more in over two years, according to data compiled by Bloomberg.
Out of more than 300 US IPOs of that size in the past century, only 13 have fared worse, the last of those being AppLovin Corp, which closed 18.5% below its IPO price in April 2021, the data show.
In a fourth big test of the US market in a month, the German footwear maker’s shares opened trading Wednesday at US$41 a share after selling for US$46 in the IPO.
The offering itself was priced below the midpoint of the marketed range of US$44-US$49, with Birkenstock and its private equity owner, L Catterton, selling about 32 million shares on Tuesday.
The shares closed at US$40.20 in New York trading, giving the company a market value of US$7.55bil. Including shares reserved for executives, directors and employees, the company has a diluted value of about US$8.15bil.
“Strong first-day pops earlier in the year probably attracted some ‘hot money’ into a number of recent IPOs, allowing them to price up,” said Matthew Kennedy, senior IPO market strategist at Renaissance Capital. “But aftermarket buyers have now been burned by IPOs multiple times, so it’s no surprise they finally threw in the towel and refused to pay up this time.”
The company sold 10.8 million of the shares, while L Catterton offered 21.5 million. The buyout firm and its affiliates will continue to own about 83% of the stock and control the company, according to filings with the US Securities and Exchange Commission.
The offering was led by Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley. Birkenstock shares are trading on the New York Stock Exchange under the symbol BIRK.
The IPO comes after the biggest month for US listings since January 2022, according to data compiled by Bloomberg. British chip designer Arm Holdings Plc, backed by SoftBank Group Corp, raised US$5.23bil including so-called greenshoe shares in September, followed by and grocery delivery startup Instacart at US$660mil and marketing and data automation provider Klaviyo Inc with a US$576mil IPO.
Arm’s shares have gained a modest 7.2% from their IPO price, while Instacart is trading 17% below its offer price. Klaviyo has fared the best of the cadre but even after a 22.5% jump in its trading debut, its IPO investors have seen a return of 12%.
The mixed performance by those three and now Birkenstock sharpen the focus on whether dozens of startups that have been eyeing the public market will decide to move ahead or keep waiting. Those companies include an array of diverse businesses such as activewear brand Vuori Inc, weight-loss drugmaker Carmot Therapeutics and GameChange Solar, whose backers include a Koch Industries affiliate, among other candidates, Bloomberg News has reported.
Closer to home for Birkenstock, Triton last week postponed a planned share sale for German gearbox maker Renk AG after a global stock market rout.
On Wednesday, French software company Planisware postponed its IPO on Euronext Paris, citing challenging market conditions.
Unlike many of the potential IPO candidates, Birkenstock is profitable. The successor company had a net profit of ¤103mil on revenue of ¤1.12bil for the nine months ended June 30, compared with ¤129mil on revenue of ¤925mil for the same period a year earlier, according to its filings. — Bloomberg
