The initial public offering (IPO) of Birkenstock (BIRK) fizzled as the stock of the German shoemaker fell 13% on its first trading day.
Birkenstock’s shares began trading on the New York Stock Exchange at $41 U.S., down 11% from the IPO price of $46 U.S. per share.
By the end of the day, the stock closed down 13% at $40.20 U.S. a share. In the end, the IPO raised $1.48 billion U.S. for the company and its owners. The closing price on the first day of trading gives Birkenstock a market value of $7.55 billion U.S.
Prior to the IPO, some analysts had raised concerns about Birkenstock’s valuation, noting that to justify the roughly $8.5 billion U.S. valuation, the company would need to generate more than $3.8 billion U.S. in annual revenues, which is three times its fiscal 2022 revenue.
Birkenstock isn’t the only IPO to disappoint in recent weeks. Both chipmaker Arm Holdings (ARM) and online grocery delivery company Instacart (CART) have seen their share prices fall since their market debuts in September.
Analysts say the poor IPO showings reflect an atmosphere of caution and risk avoidance among investors who continue to worry about interest rates and geopolitical events.
