Wilson products at the Paragon Sports store in the Chelsea neighborhood of New York on January 4, 2024.
Jeenah Moon | Bloomberg | Getty Images
Amer Sports, the Finnish sports company behind Wilson tennis rackets and Arc’teryx, debuted on public markets on Thursday with a 5% rise after pricing its IPO at a discount.
The stock opened on the New York Stock Exchange under the symbol “AS” at $13.40 per share. Amer had priced its IPO at $13 per share and raised $1.37 billion through the offering. It originally expected to offer 100 million shares at $16 to $18 each.
The offer values Amer at about $6.3 billion, down from its previous valuation of up to $8.7 billion.
When Amer debuted, only 2.5 million shares traded, indicating little interest from sellers and low for an offering of 105 million shares. Typically bookrunners would look to open with around 10% of shares, which would be around 10 million shares.
Amer’s decision to downgrade the IPO came after Federal Reserve Chairman Jerome Powell suggested the central bank was unwilling to begin cutting interest rates, dampening market sentiment and the sluggish IPO market.
Wall Street has been eagerly awaiting a revival of the IPO market after it was almost at a standstill over the past two years, but there have been recent debuts including from a German shoe maker Birkenstockwere muted and failed to impress.
Amer Sports, (AS.N), parent company of sporting goods brands, hangs at the front of the New York Stock Exchange (NYSE) during the company’s initial public offering in New York City, United States, February 1, 2024.
Brendan McDermid | Reuters
Amer operates some of the most recognized brands in sports. But its balance sheet is burdened with $2.1 billion in debt, and the company made no profits between 2020 and September 2023, according to a securities filing.
In the nine months ended Sept. 30, the company reported revenue of $3.05 billion, up from $2.35 billion in the same period last year. The company posted a net loss of $113.9 million in the period, higher than the loss of $104.4 million in the year-earlier period.
The company’s business in China is growing at a time when tensions between the US and Beijing are rising. Many companies are trying to diversify their market share to reduce their exposure to disruptions in the region.
Investors also had concerns about America’s ties to China and its dependence on the region, according to a person familiar with the matter.
In 2020, Amer did 8.3% of its business in Greater China and in 2022 that figure almost doubled to 14.8%. In the nine months to September 30, 19.4% of sales came from the region.
In an interview with CNBC, CEO James Zheng said, “China is important” for Amer, but “it’s only part of the whole.”
“Our largest market is still in North America, where it accounts for 40% of the business, and Europe accounts for 32%. China currently only accounts for 20%, so it is part of the business,” Zheng said. “We are a global company.”
—Additional reporting by CNBC’s Bob Pisani
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2024-02-01 18:28:17
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