German sandal maker Birkenstock has reportedly priced its initial public offering at $46 a share, on the low end of its expected range, as investors remain cautious about new public debuts.
The news was reported late Tuesday by Bloomberg and the Wall Street Journal. With that pricing, Birkenstock would raise around $1.5 billion at a valuation of $8.6 billion. The company did not immediately respond to a request for comment.
Birkenstock had expected to sell more than 32 million shares at an IPO price of between $44 and $49 a share. The company is expected to start trading on the New York Stock Exchange on Wednesday under the ticker “BIRK.” Goldman Sachs, JPMorgan and Morgan Stanley are the lead underwriters.
Also read: Birkenstock’s looming IPO is expected to become the next test of investor appetite for deals
Renaissance Capital Founder and CEO Bill Smith said Birkenstock was hoping to appeal to investors based on a “combination of profitability and growth, along with widespread brand recognition.”
However, New Constructs Chief Executive David Trainer raised concerns about the company’s potential valuation, when compared with rival footwear makers, and noted the weaker performances from recent IPOs like Instacart
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and Arm Holdings
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“We don’t doubt that Birkenstock has strong brand equity and produces stylish sandals, but there is really no reason for this company to be public,” he said. “We do not think investors should expect to make any money by buying this IPO.”
This post was originally published on Market Watch
