Birkenstock Struggles On Wall Street; Investors Deem Shares Too Pricey

Birkenstock experienced a stumble during its stock market debut on Wednesday, October 11, 2023.

On the day of its IPO, the company's stock opened at $41, which was below the expected range of $44 to $49 from just a week earlier. I Photo: Birkenstock Facebook

This event occurred on a day when Wall Street traders temporarily exchanged their wingtips for sandals, Michelle Chapman reported for the Associated Press (AP).

Some traders on the floor of the New York Stock Exchange (NYSE) sported the iconic open-toed footwear, while Birkenstock CEO Oliver Reichert rang the opening bell, surrounded by people waving sandals in the air.

However, investor enthusiasm did not match the festive atmosphere, as many viewed the price for a stake in the 249-year-old German company as excessively high.

The maker of high-end sandals initially set a share price of $46 for its initial public offering (IPO), valuing the company at $8.64 billion. On the day of its IPO, the stock opened at $41, which was below the expected range of $44 to $49 from just a week earlier. By day's end, it had declined by 12.6% to $40.20.

Birkenstock Holding Ltd. sold about 10.8 million shares in the offering, raising approximately $495 million, while its shareholders sold an additional 21.5 million shares.

So far this year, among the 24 other IPOs that raised at least $100 million, the average first-day return was 20%, according to Renaissance Capital, a firm specializing in IPO research.

The company's footwear was first crafted by Johann Adam Birkenstock in Germany in 1774. Although Birkenstock sandals have been long criticized as the antithesis of high fashion, they maintain a dedicated following and received notable attention in the blockbuster movie "Barbie" this summer.

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