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The debut marks the second major test of investor appetite for specialty retail stocks in the last few months after luxury sandalmaker Birkenstock (NYSE:BIRK)’s disappointing debut late last year.
After a two-year dry spell, IPOs are expected to rebound in 2024 on firming bets of a soft landing for the U.S. economy. But the recovery has been uneven so far.
Amer Sports, which owns a slate of iconic sports brands like Arc’teryx and Salomon, sold 105 million shares priced at $13 each to raise $1.37 billion on Wednesday. It had earlier indicated a range of $16 to $18.
CHINA JITTERS
China’s Anta Sports acquired Amer Sports in a deal that valued it at more than $5 billion in 2019. But the China link could also be weighing on investor sentiment.
“Potential shareholders seem uneasy about Amer Sports’ growth opportunities being overly affected by its reliance on demand from China and therefore may want to discount its valuation,” said Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.
The company generated 19.4% of its sales in China in the first nine months of 2023, up from 8.3% in 2022, its IPO prospectus showed.
Amer Sports also said it has key suppliers and manufacturing facilities in China, and warned that escalating trade tensions could lead to future tariffs or other curbs on its ability to sell goods in the United States that it makes or sources in China.
“There are questions regarding whether they can maintain their pace of growth across developed and emerging markets. The summer 2024 Olympics in Paris may help raise excitement,” Schulman added.
