New York, NY – The IPO market has been experiencing a surge in activity, but not all new offerings are receiving a warm reception. According to financial expert Jim Cramer, the recent debut of sports brand conglomerate Amer Sports fell short of expectations, resulting in a less than stellar performance on the stock market.
Amer Sports, known for popular brands such as Wilson and Arc’Teryx, opened at $13.40 per share, valuing the company at approximately $6.3 billion. This valuation is notably lower than the company’s initial target of up to $8.7 billion, reflecting a disappointing start for the IPO. Additionally, the company carries a significant debt burden of $2.1 billion, which has raised concerns about its financial stability.
Cramer highlighted the company’s reliance on sales in China for its recent growth, cautioning that this momentum may not be sustainable as it was partially driven by the end of lockdowns in the country. He also expressed apprehension about the exposure of companies like Amer Sports to the Chinese market, given the country’s economic challenges.
The financial expert emphasized that Amer Sports’ discounted IPO price, which resulted in a lower than expected fundraising amount, is indicative of a lackluster performance in the current IPO landscape. He urged underwriters to exercise caution in bringing such deals to market, in order to avoid tarnishing the overall IPO market.
This lackluster debut is part of a larger trend in the IPO market, with other recent offerings such as Birkenstock and BrightSpring Health also failing to meet Wall Street’s expectations. As the market continues to heat up, investors are advised to approach new IPOs with caution, carefully evaluating the financial health and growth prospects of the companies in question.