Shares of Birkenstock dropped another 6% yesterday, deepening losses after the German luxury sandal seller stumbled the day before in its Wall Street debut.
In its first session on Wall Street on Wednesday, Birkenstock tumbled over 12% from the $46 price set in its initial public offer, raising $1.48 billion. It had aimed to price the IPO for as much as $49 a share.
Last trading at about $37.79 last night, the stock has now dropped 18% from its IPO price.
The second-day drop in Birkenstock shares was deeper than a broad Wall Street sell-off, with the S&P 500 down about 1%.
The 250-year-old company's underwhelming US market debut follows weak performances from chip designer Arm Holdings, and grocery delivery platform Instacart, formally called Maplebear, following their IPOs last month.
Some investors had hoped those marquee companies would spark a resurgence in public listings after volatile markets in the past two years dampened demand for IPOs.
Arm yesterday slumped 5.2% to $51.70, just above its $51 IPO price on September 13, while Instacart was down 1.7% at $24.52, well below its $30 IPO price on September 18.
With yesterday's loss, Birkenstock has a market capitalszation of about $7 billion, or nearly $8 billion on a fully diluted basis.
But that is still nearly double the $4.35 billion at which L Catterton, the US private equity firm backed by French billionaire Bernard Arnault and his luxury goods empire Louis Vuitton Moet Hennessy LVMH.PA, paid to acquire a majority stake in the shoemaker in 2021.
Birkenstock's listing on Wednesday coincided with a sharp drop in LVMH's shares following the luxury brand's slower third-quarter sales growth.
"The timing of the IPO was in a way unfortunate as it followed LVMH Q3 results, in which management stressed how European consumers had deteriorated in a significant way in Q3," said Javier Gonzalez Lastra, Investment Partner at Tema ETFs.
