Grill makers benefit from slow-cooked IPOs

Dole

06/08/2021 17:18

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
    NEW YORK, Aug 6 (Reuters Breakingviews) - The IPO market
might be cooling, but Weber  WEBR.N  and Traeger  COOK.N 
suggest it’s not frozen. The grill makers’ shares opened more
than 20% above their initial public offering price and have
climbed since. Both make a tangible product and are growing. And
unlike the highly volatile Robinhood Markets  HOOD.O 
 urn:newsml:reuters.com:*:nL1N2PB17W, which listed last week, they’re relatively easy to
value.
    Weber went public on Thursday with shares opening 21% higher
than the downsized IPO price of $14  urn:newsml:reuters.com:*:nL4N2PC3GA. That gave it a
market valuation of $5 billion. Traeger went public last week,
and shares have since increased two-thirds from its IPO price,
giving it a $3.4 billion valuation, above what Breakingviews
estimated  urn:newsml:reuters.com:*:nL1N2OO13B. Traeger’s enterprise value of more than
3 times estimated sales for this year, versus 2 times at its
larger rival, could make sense if investors see it as a luxury
product. 
    While the norm for this year has been new stock issues
rising almost 40% on their first day  urn:newsml:reuters.com:*:nL1N2P61AL, not all are
so lucky. Take Dole  DOLE.N , the fruit company whose shares are
trading below its IPO price. But if companies with sensible
business models can find a stable valuation then the
metaphorical plate is still half full.  (By Amanda Gomez)

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 (Editing by John Foley and Oliver Taslic)
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