How do you feel about hippie footwear?
Me?
As a gorilla – I have no use for shoes in general…
But if I did – I probably wouldn’t buy Birkenstocks – they’re just not my style.
However, I would be remiss to acknowledge their popularity amongst the younger generations – as I see them EVERYWHERE.
That being the case – I understood why the shoe company was going public…
It’s a legacy brand with a huge following – especially when you keep in mind its appeal is one that crosses generations.
Its shoes are moderately priced…
Yet, expensive enough that it’s easy to see how it makes a profit.
So, then…
Why did Birkenstock stumble out of the gate?
What went wrong with this IPO?
Let’s take a closer look…
Yes…
The highly anticipated initial public offering of Birkenstock (BIRK) started off on an uncomfortable note…
And investors were left less than enthused about the chilly market conditions.
So…
What happened?
In a twist no hippie could have foreseen…
Birkenstock’s debut on the New York Stock Exchange didn’t quite live up to the hype.
Contrary to the idea that Birkenstock sandals hold the key to enlightenment about the universe…
Investors were hoping for a more profitable revelation.
Unfortunately, the reality was quite different – as shares closed just above $40 on the first day of trading…
Falling short of their $46 IPO price.
This less-than-stellar debut marked one of the rockiest starts for a US listing valued at over $1 billion in the past two years.
Out of more than 300 major US IPOs in the last century – only 13 have fared worse.
Despite being one of the largest IPOs in the US this year – Birkenstock’s performance did little to restore investor confidence in the challenging IPO market…
Because it’s all about the bottom line.
While LVMH’s recent underwhelming results suggest a slowdown in the high-end retail sector…
Birkenstock, with its unconventional chunky sandals – straddles the line between comfort and luxury.
Collaborations with prestigious brands like Dior and Valentino have given Birkenstock a foothold in the luxury market.
However – Birkenstock’s appeal extends beyond high fashion – as its sandals are worn by a diverse range of consumers spanning various age groups, with the average US wearer owning three pairs.
Moreover, the company is consistently growing, backed by major investors, and manages to turn a profit – a rarity among newly public firms.
So, this may not be a Birkenstock problem…
But a MARKET problem.
While the IPO market has shown signs of life after a prolonged slumber…
The truth is – three-quarters of the newly listed companies are currently trading below their IPO prices.
If this trend continues – it may discourage the numerous private companies contemplating IPOs from taking the plunge anytime soon.
Investors and market observers are closely watching to see if this IPO chill will thaw and pave the way for more successful debuts in the future.
This is something that we – as investors – need to keep an eye on…
A cool IPO market is not something that we need right about now.
Not that it matters to members of GorillaTrades…
The profit opportunities we present – give them the chance to profit based on DATA – not the temperature of the IPO market.
This is why we’ve been one of the most trusted names in our industry for nearly a quarter of a century…
As we’ve given our members the chance to make a LOT of money.
We’d love to have you on board…
Which is why I’m urging you to consider joining GorillaTrades today.
We can help carry the load for you…
However, we understand that some people like to do all the heavy lifting themselves – so, just know – we’re here now or later. Whenever you need us…
Until then, keep your eye on Birkenstock.
It could be a sign of things to come!
“When the power of love overcomes the love of power the world will know peace.” – Jimi Hendrix