- According to CNBC’s Jim Cramer, investors should refrain from immediately purchasing Birkenstock shares upon its IPO this week.
- Cramer expressed concern that the stock may become highly expensive, especially during the initial frenzy.
CNBC’s Jim Cramer advised investors to stay away from the “initial feeding frenzy” surrounding the German sandal maker, Birkenstock, as it enters the market through its IPO on Wednesday.Thank you for reading this post, don't forget to subscribe!
Reuters reports that Birkenstock aims for a valuation of $10 billion, with shares priced between $44 to $49. The company received significant publicity after its shoes appeared in the popular “Barbie” movie.
Cramer cautioned investors to exercise caution when dealing with Birkenstock’s stock after the IPO, as it could become prohibitively expensive in the post-IPO frenzy.
Cramer advised against purchasing stocks at their IPO peak, particularly Birkenstock, since there is no need to keep share prices artificially low to generate interest.
Cramer questions whether Birkenstock’s recent surge in popularity is a fad or a sustainable trend. Nevertheless, he acknowledged the company’s solid growth, profitability, and positive margin trajectory.
Cramer also reported heavy bidding for the company’s shares, with major investors such as luxury goods giant LMVH and a Norwegian hedge fund-linked enterprise acquiring approximately 42% of the available shares.
He stated that IPOs often have a promising start, but those who purchase stocks through market orders usually end up disappointed. Cramer suggested waiting for the stock to cool down before considering investment.
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