Birkenstock shares indicated to open 4% above IPO price in US market debut

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Oct 11 (Reuters) – Birkenstock (BIRK.N) looked set for a tepid U.S. market debut on Wednesday as its shares were indicated to open 4% above their offer price, giving the German sandal maker a potential valuation of $9.74 billion. The company’s stock was indicated to open between $46 to $48 on the New York Stock Exchange, compared with its initial public offering price of $46. The stock sale raised $1.48 billion. “It’s clear there is some caution among investors about the path ahead for the brand, as the price set of $46 a share was at the middle, not top end of the initial range,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Birkenstock is the fourth major company to launch a U.S. IPO in the last four weeks following that of chip designer Arm Holdings , grocery delivery app Instacart (CART.O) and marketing automation platform Klaviyo (KVYO.N). Although all of them had an upbeat first day as listed entities, their shares have given up gains since then, muddying the outlook for the IPO market. As of Tuesday’s close, Instacart shares were 10% below their IPO price. Arm and Klaviyo are relatively stable, closing 9% and 16% above their IPO prices, respectively. “Birkenstock has in its favor, at least relative to Instacart (the one recent sizable IPO in the consumer space), its high level of profitability,” said Javier Gonzalez Lastra, investment partner at Tema ETFs. “Arguably, this should position Birkenstock more favorably in an environment where real interest rates are high and still rising. The stock, however, will be sensitive to expectations of top-line growth in coming months.” Birkenstock had disclosed a 21% jump in revenue to 1.12 billion euros ($1.19 billion) for the nine-month period ended June 30. Its net profit for the same period, however, fell 20% to 103.3 million euros. Reuters Graphics Founded in 1774 in the German village of Langen-Bergheim, the company was run by the Birkenstock family for six generations, until a majority stake was sold to L Catterton, the PE group backed by France’s Bernard Arnault and his luxury goods empire Louis Vuitton Moet Hennessy (LVMH.PA), in 2021. The brand gained widespread attention after Australian actress Margot Robbie wore a pair of pink Birkenstocks in the final scene of the hit movie, “Barbie”, which was released this summer. “The movie fueled a spike in online searches for Birkenstock sandals. Similar investor excitement could reasonably fuel near-term demand for the stock,” said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors. Despite all its pop-culture allure, some industry experts say that the stock may not be on retail investors’ radar at least in the near term. “It lacks the market-related factors that lend well to becoming a meme stock like high short interest, a low free-float, or a major news event,” said Tommy Tranfo, head of community at retail-investor-focused forum StockTwits. “Since investors have been burned by many of the IPOs and SPACs from the last few years, there is a common theme of waiting until the dust settles,” Tranfo added. L Catterton will continue to own nearly 83% of the sandal maker. The PE firm had acquired a stake at a valuation of about $4.3 billion. Birkenstock has partnership deals with luxury fashion brands, including Dior, Stüssy, Manolo Blahnik and Rick Owens. Goldman Sachs, JPMorgan Chase and Morgan Stanley were the lead underwriters for the IPO. ($1 = 0.9431 euros) Read Next Worldcategory India’s Go First airline gets expression of interest from Jindal Power – sources 3:52 PM UTC · Updated ago Businesscategory Siemens Energy to sell high-voltage component business to Triton 3:48 PM UTC · Updated ago Shareholder Activismcategory Exclusive: NCR in talks to merge ATM business with Brink’s -sources 3:37 PM UTC · Updated ago Dealscategory Planisware postpones Euronext, marking third European float fail in a week 3:34 PM UTC · Updated ago Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Anil D’Silva Our Standards: The Thomson Reuters Trust Principles. Acquire Licensing Rights, opens new tab Manya Saini Thomson Reuters Manya Saini reports on prominent publicly listed U.S. financial firms including Wall Street’s biggest banks, card companies, asset managers and fintechs. Also covers late-stage venture capital funding, initial public offerings on U.S. exchanges alongside news and regulatory developments in the cryptocurrency industry. Her work usually appears in the finance, markets, business and future of money sections of the website. Contact: 9958867986 Niket Nishant Thomson Reuters Niket Nishant reports on breaking news and the quarterly earnings of Wall Street’s largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.

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