Amer Sports, the Finnish sporting goods company best known for owning brands like Wilson, Arc’teryx, and Salomon, has priced its initial public offering (IPO) on the New York Stock Exchange below its estimated range at $13 per share. The company had originally set a price range of $14 to $16, but ended up pricing at a discount due to concerns over its reliance on China.
IPO Raises $1.37 Billion Despite China Worries
Even with the lowered share price, Amer Sports’ IPO raised $1.37 billion, making it one of the largest public listings so far this year. The money will help Amer Sports pay down debt and fund its expansion plans.
However, some analysts say investors were spooked by Amer Sports’ dependence on China, which accounts for over 20% of its sales. Chinese athletic apparel maker Anta Sports owns roughly 95% of Amer Sports, after acquiring the Finnish company for $5.2 billion in 2019.
There are worries that if US-China trade tensions escalate, it could significantly impact Amer Sports’ business. The company also relies heavily on Chinese manufacturing to make its products.
Share Price Closes Down on First Day of Trading
Amer Sports began trading on the NYSE this morning under the ticker “ASports.” Shares opened at $13, matching the IPO price, but quickly fell over 5% in early trading.
The stock closed its first day at $12.30 per share, down over 5% from its IPO price. This lukewarm reception shows investors remain cautious about the geopolitical risks associated with Amer Sports’ China exposure.
| Share Price Timeline |
|---|
| IPO Pricing: $13 per share |
| Open: $13 per share |
| Day’s Low: $12.15 per share |
| Close: $12.30 per share |
Outlook Remains Uncertain Due to China Links
It remains to be seen whether Amer Sports can thrive as a publicly-traded company given its ties to China. The company possesses strong athletic brands, but some analysts say its growth prospects are limited if tensions between the US and China continue to grow.
There is also the challenge of battling local rival Nike on its home turf. As a foreign company predominantly owned by a Chinese parent, Amer Sports could face an uphill climb in gaining US market share.
While the workout and athleisure trend remains strong in the US, investors have signaled through the weak IPO pricing that they still need more convincing when it comes to Amer Sports’ strategy.
Can Iconic Brands Overcome Geopolitical Headwinds?
Much of Amer Sports’ success will hinge on its portfolio of iconic sporting goods brands. In addition to Wilson, Arc’teryx, and Salomon, it also owns Louisville Slugger baseball bats, Atomic skis, and cycling equipment maker Mavic.
The company is counting on these brands’ name recognition and loyal customer bases to drive sales growth, especially in the US. However, these brands on their own may not be enough to mitigate issues like supply chain bottlenecks or consumer backlash against China.
If tensions with China worsen, Amer Sports could also face pressure to reshuffle its manufacturing base or even relocate its headquarters out of Finland. While CEO Heikki Takala has insisted the company will retain operational independence from Chinese owner Anta Sports, geopolitics could force some difficult changes.
Final Thoughts
Amer Sports embarks on its return to the public markets in an uncertain environment clouded by geopolitical tensions. Its strong brand portfolio provides some optimism, but reliance on Chinese manufacturing and ownership makes the company more vulnerable to external shocks.
It remains to be seen whether performance of household names like Wilson and Arc’teryx products can transcend bigger picture worries over US-China relations. Amer Sports faces a tough path ahead to win over skeptical investors focused intensely on these long-term strategic risks.
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