The IPO Market Isn’t Playing Ball With Amer

Investors pinning their hopes of a resurgent IPO market on Amer Sports were served a swift reality check on the athletic conglomerate’s public debut on Thursday. Hitting the New York Stock Exchange with 484 million shares trading at $13.40, Amer raised $1.3 billion and ended the day with a market capitalization of $6.49 billion. 

That fell short of expectations: The company had ambitions to price 100 million shares between $16-to-$18, in what would have given Amer a potential valuation nearing $8.7 billion. On Thursday, 2.5 million shares were traded. 

Amer, the holding company for legacy sports and outdoor brands Wilson and Arc’teryx, among others, was founded in Finland and is currently headquartered in Helsinki. Prior to Thursday, it was viewed as a possible resuscitation vehicle for a beleaguered IPO market. Amer has been operated by a Chinese consortium that includes the country’s largest athletics manufacturer, Anta Sports, since 2018. The consortium’s biggest players include FountainVest Partners, Anamered Investments, and Chinese tech conglomerate Tencent.

With a possible IPO for Chinese fast-fashion giant Shein looming, Amer was meant to test the waters with similar corporate fundamentals in a hostile proving ground. So far, it’s hovered close to its debut price, trading around $14 on Friday. 

As securities filings show, Amer grew revenues 29%–to $3.1 billion from $2.4 billion–over the last 9 months of 2023, but posted a net loss of $113.9 million over the period. The same filings indicate that Amer also has $2.1 billion in outstanding debt as of last September. The Chinese market is Amer’s fastest growing footprint: “We believe there is significant runway for growth in the region as we continue to roll-out retail locations across our brands and scale our e-commerce platform,” the filing states. 

But in the languid IPO market, even profitable companies have suffered. Instacart and Klaviyo, for example, had both posted profits before going public last year. Their stuttering performances were a warning then, according to Phil Haslett, founder and chief strategy officer of Equity Zen. He told Inc in December that companies mulling a public debut are “probably taking a look and saying ‘Instacart was growing revenue, and they were profitable. Klaviyo was growing revenue, and they were profitable and they [both] trended down. So, what are we supposed to do?'”

Certain analysts, such as CNBC’s Jim Cramer, have implored investors to “stay away” from Amer, owing to its debt and its perceived reliance on China. Its outstanding debt seems to be front of mind for the company’s top brass as well: Amer plans to use its IPO fundraise to partly reimburse its creditors, a company representative told the Wall Street Journal