This week began with an exciting market debut. Innovative Eyewear (NASDAQ:LUCY) began trading on the Nasdaq, offering 1 million units priced at $7.50 each. This initial public offering (IPO) is smaller than the company’s original proposal, in which it sought to offer 1.5 million units. The trading symbol is a nod to its signature product, the Lucyd Lyte, which pairs “open-ear audio, a crisp microphone and Bluetooth touch controls,” with prescription frames. These glasses are available through both the company website and retail outlets such as Amazon (NASDAQ:AMZN) and Best Buy (NYSE:BBY). However, none of this made for a good debut for LUCY stock.
What’s Happening With LUCY Stock
LUCY stock initially rose this morning after markets opened. But within a half hour, it had started falling and wouldn’t stop for two hours. By 11:30 am, it had plunged 28%. While shares quickly attempted to rally, the rest of the day has been marked by turbulence with no real growth. As of this writing, it is down more than 20% for the day and shows no signs of a rebound. Even if it rises from here, it will mark a very disappointing IPO.
Let’s take a closer look at what this means for the future of Innovative Eyewear.
What It Means
A poor IPO does not mean a stock is doomed to be a market flop. Robinhood (NASDAQ:HOOD) went public on July 29, 2o21 in what SoFi (NASDAQ:SOFI) described as “one of the worst IPOs ever for a company of its size with shares falling as much as 10% within minutes of the opening of trading.” Companies such as Uber (NYSE:UBER) and Etsy (NASDAQ:ETSY) also disappointed Wall Street on their first trading days.
Does this mean that LUCY stock will quickly bounce back and become a Nasdaq darling? As of now, it’s hard to say. But what we do know is that it is operating in a sector with plenty of growth potential. Data from Grand View Research indicates that the eyewear industry is expected to demonstrate a compound annual growth rate (CAGR) of 8.4% between 2022 and 2030. As the report notes, “The changing lifestyle patterns and increasing adoption of luxurious accessories among millennials strongly favor market growth.”
That trend is likely to bode well for LUCY stock. Trendy eyewear is a popular item among millennial consumers. If adaption is increasing, the market is ripe for a product that combines fashionable eyewear with the bluetooth technology. The growing popularity of smart watches and wireless earbuds further supports the theory that bluetooth glasses are the next logical step forward.
Adding to the bullish case for LUCY stock is the recent success of one of its peers. Warby Parker (NYSE:WRBY) doesn’t produce digital eyewear, but its trendy glasses have garnered a significant fanbase among millennial consumers. Despite a difficult year, WRBY has risen almost 40% throughout the past month. As InvestorPlace contributor Josh Enomoto notes, “myopia is rising. Indeed, experts project that by 2050, almost half of the world will be myopic. If Warby can hang on, it could end up being one of the best small-cap stocks to buy on the dip.”
That argument also applies to Innovative Eyewear. If LUCY stock can find its footing and reassure investors of its staying power, it has the potential to overtake WRBY and transform the way America sees. Investors should watch the stock closely as it adjusts to trading on the Nasdaq.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
