Mytheresa came into the market with a big price hike, but still managed to post double-digit gains in its introduction.
The Munich-based firm luxury e-commerce merchant priced its initial public offering at $26 a share — well above the $16 to $18 initially envisioned — and then saw its stock rise 26.2 percent above that elevated price to $32.82 in midday trading Thursday.
That left the company with a market capitalization of $2.9 billion, trading under the ticker MYTE on the New York Stock Exchange.
IPOs are a two-step process. Mytheresa and its backer — private equity company Ares Management — first sold a combined 15.6 million shares to big institutional investors at $26 a share. Those investors then turned around and started selling shares on the open market, where the stock rose further.
Mytheresa made $354.8 million and plans to use much of that money to pay back a loan from Ares, which also sold $52 million worth of stock in the offering.
Even though the coronavirus pandemic still has the world on its back — with over 400,000 dead in the U.S. alone — and the economy is in shambles, times are good on Wall Street. In part that’s because Washington has pumped trillions of dollars into the economy to help see it to the other side.
While many companies and people have fallen through the gaps — 900,000 people filed for first-time unemployment claims last week, according to the Labor Department — the luxury set that Mytheresa caters to has largely been able to hunker down at home and funnel more spending dollars into e-commerce.
Mytheresa’s adjusted income during the year ended June 30 rose 22.2 percent to 19.3 million euros as sales advanced 18.6 percent to 449 million euros.
The website has taken an unusual path to Wall Street.
Ares and its partner, the Canada Pension Plan Investment Board, bought Neiman Marcus Group for $6 billion in 2013 with big dreams of building the tony merchant. Part of that was the 2014 acquisition of Mytheresa.
But Neiman Marcus struggled to pay off the debt that came from its own buyout and took center stage. As the business suffered, the much smaller, but growing Mytheresa was carved out in a way that had debtholders crying foul and claiming the private equity company was taking their collateral.
That came to a head after the coronavirus lockdowns sent Neiman Marcus tumbling into bankruptcy.
The resulting scramble to grab Mytheresa saw hedge fund Marble Ridge closed and its managing partner, Dan Kamensky, charged with securities fraud, extortion, wire fraud and obstruction of justice.
That drama over, Ares eventually settled with other lenders in the process, securing control of the business and setting it up for Thursday’s IPO.
Now Mytheresa is worth nearly half of what Neiman Marcus was when Ares bought in.
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