By Ciara Linnane
The deal comes at a time when aftermarket performance of recent deals has been weak
The IPO market is preparing for the Birkenstock deal to close this week. The iconic German sandal maker is expected to price its shares on Tuesday and debut on Wednesday.
Currently, the IPO is the only one expected this week — although some smaller issuers may choose to enter late in the calendar, according to Renaissance Capital, a provider of IPO exchange-traded funds and institutional research.
Birkenstock (BIRK) plans to offer 32.3 million shares priced at $44 to $49 each. The company would earn $1.58 billion at the high end of that range at a valuation of $9.2 billion.
The company has applied to list on the New York Stock Exchange under the ticker symbol BIRK. Goldman Sachs, JPMorgan and Morgan Stanley are lead underwriters on a team of 22 banks working on the transaction. Underwriters have the option to purchase up to 4.8 million additional shares from the selling shareholders to cover over-allotments.
Read more: Birkenstock goes public: 5 things to know about the legendary German sandal maker’s IPO designs
“Birkenstock offers a combination of profitability and growth as well as widespread brand recognition,” said Bill Smith, founder and CEO of Renaissance Capital. “Despite its robust fundamentals, the company is going public against a backdrop of weak aftermarket trading due to recent major IPOs.”
Even before the current hostilities broke out in Israel, the market had seen three major deals lose some of their luster in the days immediately following their debut.
Chipmaker Arm Holdings Ltd. (POOR); Klaviyo (KVYO), a digital marketing company; and Instacart, doing business as Maplebear Inc. (CART); All posted strong gains on the first day of trading, but gave them back in subsequent sessions. Instacart was trading at $24.10 on Monday, well below its IPO offering price of $30.
Related: Instacart shares fall to their IPO price as investors think again
Meanwhile, a small, pre-revenue company called Gamer Pakistan Inc. (GPAK) posted a 29% loss in its first day of trading on Monday.
The company priced its IPO last week at $4 a share, the low end of a range of $4 to $5, but was unable to trade as it sorted out Nasdaq issues. The company is the first company from Pakistan to be listed on a US stock exchange.
The company raised $6.8 million in its IPO through the sale of 1.7 million shares. With 25.6 million shares outstanding, the company was valued at $102.4 million at the IPO price. The stock trades on the Nasdaq under the ticker symbol GPAK.
“We are a development-stage interactive esports event promotion and product marketing company formed in November 2021,” the company said in its filings with the Securities and Exchange Commission.
Auditor Mercurius & Associates LLP says the company’s deficit before sales “casts significant doubt on the company’s ability to continue as a going concern.” This language is not atypical for IPO filings from companies that are not yet generating revenue, such as preclinical biotechnology companies.
The Renaissance IPO ETF has gained 28% year to date, while the S&P 500 SPX has gained 13%.
Read more: E-sports company Gamer Pakistan’s stock is the first company from this country to be listed on a US stock exchange
– Ciara Linnane
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9/23/10 1453ET
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