Amer Sports, the Finnish athletic company known for brands like Wilson tennis rackets and Arc’teryx, made its debut on the public markets with a 5% increase in its stock price after pricing its initial public offering (IPO) at a discount. The stock opened at $13.40 a share on the New York Stock Exchange under the ticker “AS,” following an IPO pricing of $13 per share that raised $1.37 billion, lower than the initially anticipated valuation.
The offering values Amer at about $6.3 billion, down from an earlier valuation of up to $8.7 billion. The decision to discount the IPO came in the wake of Federal Reserve Chair Jerome Powell’s indication that the central bank isn’t considering rate cuts, which dampened market sentiment and impacted the IPO market.
Despite the lower valuation and a smaller-than-expected opening trading volume of 2.5 million shares, Amer’s finance chief Andrew Page remains confident. He highlighted the resilience of Amer’s target consumers, who have continued to choose its brands, despite a decline in demand in the overall consumer discretionary sector.
Amer’s IPO proceeds will be used to improve its balance sheet and fund growth initiatives at Wilson, Arc’teryx, and Salomon. CEO James Zheng emphasized the potential for growth, particularly in North America, where Arc’teryx has low brand awareness, indicating significant room for expansion.
However, concerns have been raised about Amer’s reliance on China, where its business has been growing amidst rising tensions between the U.S. and Beijing. Zheng emphasized the importance of building a strong presence in China but highlighted that North America and Europe remain the company’s primary markets, representing 40% and 32% of its business, respectively, compared to China’s 20%.
Despite these challenges, Amer remains optimistic about its future prospects and is focused on executing its long-term strategy of delivering innovative products to the market.
(Source: CNBC | Bloomberg | Financial Times | WSJ)
