Birkenstock Holding, the 249-year-old footwear brand, stumbled onto Wall Street last week in a debut that could quash the fledgling rebound of initial public offerings.
Timing can sometimes be everything when it comes to an IPO. Birkenstock’s investor roadshow was bookended by a potential US government shutdown, public holidays in Germany and the US, delayed listings in Europe and an outbreak of war in Israel. That cast a shadow over how some investors were viewing Birkenstock after books closed at noon Tuesday, one of the people said, and may have weighed on its trading debut. With markets already rattled by the Middle East, some larger accounts were reconsidering their appetite for the sector, they said.The NYSE during the Birkenstock IPO on October 11. Image: Spencer Platt/Getty Images
Even at $46, the price might have been too rich compared to peers. That price valued the company at 4.9 times forward price to sales, while its footwear peer group trades at just two times, according to Bloomberg Intelligence analyst Abigail Gilmartin. There’s also some debate about Birkenstock’s preference to allocate 90% of its IPO shares to long-only investors, which is more than usual. The company and L Catterton insisted from the outset, even before the roadshow started, that they wanted a book full of strong long-only investors and weren’t interested in “short-term” money, meaning hedge funds. They took very few meetings with hedge funds or alternative asset managers, the people said.