Shares in German sandal maker Birkenstock flopped on their much-anticipated Wall Street debut last night.
The 250-year-old shoemaker listed, to great fanfare, on the New York Stock Exchange at $46 a share – giving it a lofty valuation of £7bn.
But shares crashed to a low of $40.04, the 13pc fall wiping £900m off its value in a disappointing first day as a listed firm.
Michael Hewson, analyst at CMC Markets, said: ‘Timing can be everything so when Birkenstock announced it was pricing at the lower end of expectations there was perhaps some concern that the book runners had some doubts about reaching the initial valuation of up to $10bn.
‘With increasing uncertainty about the outlook for the global economy and China’s growth prospects, there was always a risk that trading might get off to a rocky start.
‘The last thing that was needed was a profit warning from LVMH, whose owner Bernard Arnault also happens to own a stake in the German sandal and clog makers business.’
The 250-year-old shoemaker listed, to great fanfare, on the New York Stock Exchange at $46 a share – giving it a lofty valuation of £7bn
The initial public offering (IPO) raised around £1.2bn, with a third used to repay debts and the rest going to majority stake holder L Catterton, the private equity firm backed by LVMH owner Bernard Arnault.
Once considered unfashionable, Birkenstock sandals have been boosted by celebrity fans and an appearance in this summer’s Barbie film.
But analysts said the decision not to price the shares at the top of the $44 to $49 range indicated that there was ‘some caution among investors’, particularly following Dr Martens’ disappointing IPO in 2021.
The bootmaker’s share price has fallen more than 70pc since it listed in London.
‘While Birkenstock may be basking in the sales sunshine right now, it’s going to have to run fast to keep up in the stylish stakes,’ said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
‘Investors who want to buy may have to buckle up for a potentially volatile ride ahead.’
Last night’s debut was the fourth major listing in New York in the past few weeks, following British chip designer Arm, delivery app Instacart and marketing automation platform Klaviyo.
The three tech firms priced their IPOs at the top or above their target range and shares soared. But they have since lost most of those gains.
Other stock exchanges have been struggling to attract listings as firms seek higher valuations in New York.
Birkenstock’s decision to list in the US was seen as a snub to Frankfurt. The boss of the London Stock Exchange yesterday said companies will get more attention if they choose London.
‘You may be a company that gets lost in the US market and gets a lot of attention in London,’ David Schwimmer said.
It has been a quiet year for the London with just two listings on the main market but analysts at EY predict a rebound next year due to a knock-on effect of the rise in activity in the US.
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