(AS) starts trading on NYSE

Wilson products on the Paragon Sports store within the Chelsea neighborhood of Latest York on Jan. 4, 2024.

Jeenah Moon | Bloomberg | Getty Images

Amer Sports, the Finnish athletic company behind the Wilson tennis racket and Arc’teryx, made a muted debut on the general public markets Thursday, as shares rose 3% after it priced its initial public offering at a reduction.

The stock opened at $13.40 a share on the Latest York Stock Exchange under the ticker “AS” and closed at the identical price. Based on the closing share price and the corporate’s 484 million outstanding shares, Amer Sports has a rough market capitalization of about $6.49 billion.

Amer had priced its IPO at $13 per share and raised $1.37 billion within the offering. It had originally expected to supply 100 million shares at $16 to $18 each. 

The offering valued Amer at about $6.3 billion, down from a previous valuation of as much as $8.7 billion. 

When Amer debuted, only 2.5 million shares traded, which indicates little sell-side interest and is low for an offering of 105 million shares. Typically, bookrunners would attempt to open with around 10% of shares, which can be about 10 million shares.

Amer’s decision to discount its IPO got here after Federal Reserve Chair Jerome Powell indicated the central bank is not ready to start out cutting rates, casting a pall over market sentiment and the floundering IPO market.

Wall Street has been wanting to see a resurgence within the IPO market after it grounded nearly to a halt over the past two years, but recent debuts, including from German shoemaker Birkenstock, have been muted and did not impress. 

While demand has fallen in the general consumer discretionary sector, Amer’s finance chief Andrew Page said its goal consumers have been resilient and continued to decide on its brands.

“Our focus at all times has been to make the very best products of their category on the earth. Our products are steeped in innovation, our consumers appreciate quality and innovation and newness,” Page said. “That’s on the core of who we’re as an organization, that is on the core of what we deliver to the market.”

He said he is not concerned with Amer’s stock performance on any single day, and the corporate is more focused on executing its long-term strategy.

Executives of Amer Sports have a good time the corporate’s initial public offering on the Latest York Stock Exchange in Latest York City on Feb. 1, 2024.

Brendan McDermid | Reuters

Amer runs a number of the most recognizable brands within the athletic space, but its balance sheet is saddled with $2.1 billion in debt, and it didn’t post any profits between 2020 and September 2023, in response to a securities filing.

Within the nine months ending Sept. 30, 2023, the corporate saw $3.05 billion in revenue, up from $2.35 billion in the identical period a 12 months ago. It posted a net lack of $113.9 million through the period, higher than the $104.4 million it lost within the year-ago period. 

In an interview with CNBC, CEO James Zheng said Amer plans to make use of the proceeds from the IPO to enhance its balance sheet and fund growth initiatives at Wilson, Arc’teryx and Salomon. He identified that Arc’teryx, known for its pricy winter jackets, has very low unaided brand awareness in North America, particularly within the U.S., so there’s plenty of room to grow.

Investors also had concerns about Amer’s ties to China and its reliance on the region, in response to an individual accustomed to the matter.

The corporate’s business in China has been growing at a time when tensions are rising between the U.S. and Beijing. Many firms try to diversify their market share so they are not as exposed to disruptions within the region. 

In 2020, Amer did 8.3% of its business in Greater China and in 2022, that figure nearly doubled to 14.8%. Within the nine months ending Sept. 30, 19.4% of sales got here from the region. 

In response, Zheng said “its quite necessary” for sporting goods firms to construct a powerful footprint in China and to this point, Amer has seen “an enormous return” on its investment within the region. He added that while the region is “necessary” to the corporate, “it’s just a part of the entire.”

“Our biggest market remains to be in North America representing 40% of business and Europe represents 32%. China immediately only represents 20%, so it’s an element of the business,” said Zheng. “We’re a world company.”

— Additional reporting by CNBC’s Bob Pisani.

Don’t miss these stories from CNBC PRO: