German sandal maker Birkenstock (NYSE:BIRK) priced its initial public offering (IPO) for BIRK stock at $46 per share as it prepared for trading today, October 11.
Birkenstock is backed by luxury conglomerate LVMH (OTCMKTS:LVMUY), which acquired a stake in the family-owned company in 2021. About 83% of the stock is held by private equity house L Catterton, which paid $4.3 billion for its stake.
How the stock trades will determine whether more companies come public this quarter.
The 7 Things
Recent IPOs for Instacart (NASDAQ:CART), Arm Holdings (NASDAQ:ARM), and Klaviyo (NYSE:KVYO) all left small investors disappointed. They priced at the top end of their expected range, popped briefly, then fell to near or below the offering price.
The record for shoe companies is even worse. AllBirds (NASDAQ:BIRD), Dr. Martens (OTCMKTS: DOCMF) and On Holding (NYSE:ONON) all trade near their offering price two years after going public.
Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM), and Morgan Stanley (NYSE:MS), all of which are participating in the offering, priced the stock at the midpoint of its expected range rather than the high-end.
Birkenstock was founded in 1774 and is known for comfortable styling. Its modern roots trace to 1925 when Konrad Birkenstock opened a factory making flexible insoles he invented. Birkenstock sandals were first imported to the U.S. in 1966 and became counterculture staples. They were later famously worn by Apple (NASDAQ:AAPL) co-founder Steve Jobs.
Under L Catterton, Birkenstock signed partnership deals with luxury brands controlled by LVMH, like Dior and Manolo Blahnik. It also launched a direct-to-consumer strategy.
Birkenstocks got product placement in the movie Barbie. The title character traded in her high heels for a pair. (It was one of the movie’s better jokes.)
Where BIRK stock trades a month from now will help determine the temperature of the whole IPO market next year.
BIRK Stock: What Happens Next?
If you believe in LVMH’s luxury strategy and Chatterton’s management skills, you might want to slip into a few shares of BIRK stock. Maybe next week.
As of this writing, Dana Blankenhorn held a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
