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Everyone knows Birkenstock: some find the shoes too ugly, while others can’t give up the cult sandals in the summer. This Wednesday, the German company made its debut on the US stock market.
But the debut was not successful: Birkenstock set the issue price at $46, with a range of $44 to $49. However, shares opened at $41, well below the issue price. Birkenstock announced that 32.3 million sheets of paper were printed.
The stock closed its first trading day at an even lower price of $40.06, 12 percent lower than expected. After Wednesday’s price loss, its market value is around $7.5 billion. That’s a billion less than expected.
The company and its shareholders misjudged the demand for securities. The sandal maker actually wanted to use the proceeds from the IPO to pay off its debts.
There was skepticism
Financial analysts were already skeptical before the IPO. Because the US stock market is too unstable right now for such an IPO. Other IPOs in the same month also disappointed. Because as long as the central bank continues to fight inflation by increasing interest rates, investors remain cautious.
The history of the cult sandal goes back a long way. The foundations of Johannes Birkenstock were laid in 1774. In the last financial year, Birkenstock posted sales of 1.24 billion euros and profits of 187 million euros. Birkenstock increased its sales by almost a fifth in the first half of the year to around 644.2 million euros.
At first, sandals were considered eco-slippers. However, shoes have undergone an image change and have now become an integral part of the fashion industry. The cult sandal even played a big role in the Barbie movie this year.
“We haven’t had a Barbie moment, to be honest,” Birkenstock boss Oliver Reichert told US broadcaster CNBC. Now we’ll see if Birkenstock can still inspire investors.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
