And amazingly, not everybody is sunny and bright about it.
Canadian Business retail correspondent Zena Olijnyk raises some doubts about Lululemon's long-term value as an investment.
Yahoo!: Got a yen for zen?
But not so fast, I say. Look a little closer and you might want to be careful: this is one public offering that has the potential, for the retail investor, at least, to turn into something resembling a downward-facing dog
...
As a result, the valuations on this IPO should give pause for consideration. Using US$11 a share, the midpoint in the expected pricing range, the stock is valued at more than 30 times operating profit, once you back out one-time costs. For a firm with US$150 million in yearly sales, the US$800-million market cap this price implies is astronomical. (Following the IPO, there would be about 75 million shares outstanding.)
Ms. Olijnyk is, of course, not the first person to point out that this IPO doesn't exactly seem like mana from the gods. I was making rude noises about this back in May.
Lululemon Public Offering Drawing Interest And Ire
Canadian Business retail correspondent Zena Olijnyk raises some doubts about Lululemon's long-term value as an investment.
Yahoo!: Got a yen for zen?
But not so fast, I say. Look a little closer and you might want to be careful: this is one public offering that has the potential, for the retail investor, at least, to turn into something resembling a downward-facing dog
...
As a result, the valuations on this IPO should give pause for consideration. Using US$11 a share, the midpoint in the expected pricing range, the stock is valued at more than 30 times operating profit, once you back out one-time costs. For a firm with US$150 million in yearly sales, the US$800-million market cap this price implies is astronomical. (Following the IPO, there would be about 75 million shares outstanding.)
Ms. Olijnyk is, of course, not the first person to point out that this IPO doesn't exactly seem like mana from the gods. I was making rude noises about this back in May.
Lululemon Public Offering Drawing Interest And Ire
Judging by the results of Google Analytics, there are lots of people curious about Yoga Lifestyle retailer Lululemon's pending Initial Public Offering. Conversely, I recieved a fair number of rude comments from my correspondents about the IPO. The best one by far was:
Wow. Chip and co. have blatantly called the market top for hundred dollar yoga pants. Now that the cow is thoroughly milked, it's time to cash out and find a bigger fool to buy the brand. Apparel trends surf a wave, and this one is due to crest.
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