According to CNBC’s Jim Cramer, the IPO market has been unpredictable, with some companies performing well, while others have not. Cramer specifically advised investors to steer clear of Amer Sports, which made its debut at a discounted price. He expressed concern over the company’s weak balance sheet, stating that it is not a wise investment. Despite a modest increase in stock value following its initial offering, Cramer emphasized his lack of enthusiasm for Amer Sports, citing it as a prime example of undesirable IPOs. Amer Sports, known for brands like Wilson and Arc’Teryx, initially opened at $13.40 per share, valuing the company at approximately $6.3 billion, falling short of its targeted $8.7 billion value. This underperformance aligns with other recent IPOs such as Birkenstock and BrightSpring Health that failed to meet Wall Street’s projections. Amer Sports’ substantial debt of $2.1 billion and less-than-ideal financial standing contributed to Cramer’s cautionary stance. Additionally, despite the company’s recent growth, which was largely driven by Chinese sales, Cramer expressed skepticism, attributing the surge to the easing of lockdowns in China, an unsustainable contributing factor. Cramer iterated his apprehension towards companies heavily reliant on the Chinese market due to its current economic challenges. He criticized investment banks for promoting such companies and cautioned against further damage to the IPO market. Cramer’s investment advice is an important consideration for potential investors in this volatile market.
