Birkenstock shares tank 13% from IPO price in rare debut unlacing

Investing

Birkenstock fizzled in its first day of trading on the Nasdaq stock exchange, bucking the recent trend of explosive debuts for newly public companies as Wall Street largely rejected the 249-year-old German sandal maker’s growth story.
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Birkenstock’s IPO Wednesday fell flat.

AFP via Getty Images

Key Takeaways
  • Shares of Birkenstock began trading at about 1:30 p.m. EDT more than 10% below its initial public offering price of $46, settling at $40.06 by market close, a 12% loss.
  • Birkenstock, which scored a $9.3 billion valuation in its IPO, now has a market capitalization of $7.5 billion.
  • The first-day blues come after blockbuster openings for other recent high-profile IPOs, a perhaps troubling sign for the broader IPO market.
  • Chip designer Arm, grocery deliverer Instacart and marketing automation firm Klaviyo also went public on New York exchanges at multibillion-dollar valuations over the last month but to far greater fanfare.
  • Arm rose 25% from its IPO price on its first day of trading, while Instacart (12% gain) and Klaviyo (9% jump) also far outperformed Birkenstock.
What To Watch For

If Birkenstock’s growing pains continue. In unwelcome news for Birkenstock shareholders, shares of their three recent IPO predecessors are down an average of 13% from their debut closing price (Arm down 14%, Instacart down 26%, Klaviyo up 2%). Such a slide would send Birkenstock to roughly a $6.5 billion valuation.

Crucial Quote

“Not a whole lot has changed” for Birkenstock since its 2021 sale at a $4.7 billion valuation, according to New Constructs CEO David Trainer. “Investors should have learned a valuable lesson in the past few weeks when it comes to IPOs,” Trainer added.

Key Background

Birkenstock filed to go public September 12, becoming the fourth member of this fall’s ambitious IPO class. The company said earlier this month it planned to IPO at the valuation of over $9 billion, a near doubling from the price tag paid to the Birkenstock family two years ago by L Catterton, a firm controlled by the Arnault family, Europe’s wealthiest dynasty behind the LVMH fashion empire. Alexandre Arnault, the 31-year-old son of family patriarch Bernard, will serve on Birkenstock’s board of directors.

This article was first published on forbes.com and all figures are in USD.

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