Shein is Going Public with a Confidential IPO Filing
Shein is Going Public with a Confidential IPO Filing
By:Mike Butler
Here's everything you need to know about Shein's IPO—the stock may start trading in the United States as early as next year
- Shein is going public with a confidential IPO filing.
- The Chinese-founded fashion retailer was last valued at $66 billion.
- Labor and valuation concerns linger ahead of going public.
- Shein may begin trading in the United States as early next year.
This week, Shein announced it is moving forward with an IPO—or initial public offering—to trade in the U.S.
The fast-fashion e-commerce retailer announced a confidential IPO filing—which is common for companies that still need to work out some details with regulators.
As tastylive's Thomas Westwater pointed out in his original article on the topic, concerns over valuation and labor could complicate the deal. The company was most recently valued at $66 billion, while a valuation last year placed it at around $100 billion.
Critics accuse Shein of using forced labor. I am sure this will be a focal point for regulators because labor laws in the United States are clear.
Deals in the U.S.
In August, Shein announced a deal to buy a one-third stake in Sparc Group, a joint venture of Authentic Brands Group—which has a portfolio including Reebok, Forever 21, Quiksilver and Nautica—and Simon Property Group (SPG), the largest owner of shopping malls in the United States. This move could bode well for the IPO process and help regulators see that Shein is ready to tap into the U.S. markets.
Last month, Shein followed the deal by forming a partnership with Authentic Brands' Forever 21 retail chain. Under the deal Shein will design, manufacture and distribute a line of co-branded Forever 21 apparel and accessories.
Shein has already hosted pop-up events in Forever 21 stores.
Simon Property stock is trading near the higher end of its range this year, currently at $123 per share:
IPO trading implications
When a company goes public, shares of stock can be bought or sold shortly after. Once the company receives a ticker symbol, investors can trade these products when the stock market is open.
If trading demand is strong enough, options contracts are usually listed a few weeks later. IPO products are typically very volatile, which means implied volatility in the options market is usually quite high, which sparks the attention of many traders.
We'll have to see where the stock price is set for the IPO, but there will be more to come in the next few months as information is released.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
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