Can Birkenstock’s Barbie boost kick the IPO market into life?
Analysts are hoping flat-soled Barbie favourite Birkenstock can help kick the IPO market into life on both sides of the Atlantic as it gears up to float on the New York Stock Exchange today.
The German sandalmaker opted for a tame valuation at the middle of its guidance range at $46 per share to account for the volatility that has rocked public markets globally over the past year.
Wall Street wonks’ hopes are high for the firm on the back of a boom in sales and a wave of interest sparked by the blockbuster sensation Barbie earlier this year.
Barbie, played by Margot Robbie, wore a pink pair of Birkenstocks in the final scene of the movie which was released this summer.
A host of big names have floated in New York in recent weeks, including chipmaker Arm and delivery outfit Instacart, but have failed to set investors’ interest alight.
Analysts said Birkenstock had wisely not decided to price its valuation at the top end of its target range unlike Instacart and Arm.
“Still, the premium valuation raises the risk that Birkenstock follows a similar path,” said Josh Warner, market analyst at City Index.
Instacart took less than a week to slip below its IPO price after setting its valuation too high, while Arm has also struggled to gain any significant ground because of its bumper price tag.
“The big-name additions to have gone public in recent weeks and months have failed to revive the IPO market thus far, and Birkenstock is at risk of becoming another underwhelming listing that offers limited upside potential for investors.”
The float comes after a torrid period for the public markets in which IPOs have dropped off a cliff amid extreme volatility.
Analysts in London said there were hopes the float could help swing the window open on both sides of the Atlantic.
“With Birkenstock following hot on the heels of the listings of Arm and Instacart in New York, it shows the IPO market is gaining momentum after a very slow period when caution has been high about the tight monetary policy environment,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“Many companies are still wary of the uncertain path ahead for the global economy, particularly for sectors sensitive to consumer behaviour and a New York listing in this environment is still considered to offer more ballast, even though a spell of volatility regularly comes immediately after an IPO.”
The float marks a shift onto the public markets after 250 years for the sandal firm. Birkenstock was founded in 1774 in the German village of Langen-Bergheim by shoemaker brothers Johannes Birkenstock and his younger brother Johann Adam Birkenstock.
The family ran the business for six generations after its founding.