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Take a look at some of the most popular initial public offerings (IPOs) of recent years, and most often the underlying entities cater to relevant industries, primarily software technology, electric vehicles and clean energy infrastructure. You rarely find a barbecue company eager to go public (at least not until recently), but that’s what we have with the Weber IPO and subsequent stock offering.
Best known for its high-quality outdoor grills, as well as smaller portable cooking solutions, the food prep equipment maker is looking to capitalize on the renewed interest in outdoor activities due to the sweltering pandemic. of COVID-19.
When did Weber go public?
Weber went public on August 5, 2021, selling just under 18 million shares at $14 each.
Weber financial history
Last summer, when the usual hub of activity for people heading out to take advantage of the warmer weather cooled significantly due to the still-unfolding public health crisis, one sector filled a burgeoning opportunity gap : outdoor and portable grills. According to a report by The Despatch of ColumbusRob Schenz, owner of Specialty Gas House in Clintonville (a neighborhood in Columbus, Ohio), said these products were selling like hot cakes.
Additionally, Brian Aliff, manager of a nearby Lowe’s (NYSE: LOW) store, said that “it’s hard to go get a good steak at a steakhouse right now.” Additionally, Aliff mentioned that “…with restaurants either closed or very hard to get to, more and more people are cooking them at home. We have seen a significant increase this year with (the sale of) grills and grill accessories. »
Predictably, Weber converted this immense enthusiasm into solid financial results. In the fiscal year ended September 30, 2020, the company generated net sales of $1.53 billion, up double digits from sales in 2019 and 2018 of nearly $1.3 billion and $1.34 billion, respectively. Additionally, Weber delivered results as well, with net income of $89 million up more than 77% from 2019 results (although down 21.5% from 2018 earnings). $113.3 million).
But the most critical point is that the outdoor grill maker continues its momentum this year. For the 6 months ended March 31, the company recorded sales of $963.3 million, up 61.5% from a year earlier. Furthermore, that tally is already 73% of the annual sales average for 2018 and 2019, suggesting that Weber has a huge way to go.
Following a meeting with potential investors to stimulate interest and ensure there is sufficient demand to support a new public offering, Weber changed its IPO date to August 5 on IPO schedule. Shares of the outdoor grill maker would then sell on the New York Stock Exchange (NYSE) under the symbol “WEBR”.
According to its filings with the Securities and Exchange Commission, Weber planned to sell about 46.9 million shares. Management expected the price range to be between $15 and $17 per share, with upside potential of over $797 million at the higher end of the estimated spectrum. If so, that tally would have given Weber a valuation of nearly $5 billion.
Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) subscribed to the public offering.
Normally, an outdoor grill maker probably wouldn’t attract so much attention. But because the COVID-19 pandemic has forced the closure of restaurants, as well as the temporary elimination of non-essential activities, households have had no choice but to cook for themselves.
In turn, the food preparation industry soared, with rival Traeger – doing business under the TGPX Holdings (NYSE:COOK) corporate umbrella – listing its shares on the last Thursday of July 2021. Not wanting to miss the chance to hit the iron while he’s hot, Weber put his hat in the ring.
The primary catalyst for Weber’s IPO was the COVID-19 pandemic, particularly the changes in consumer behavior it forced. More visibly, the general inability to travel comfortably forced people to be creative, which for many people meant “holidays”. Data from the Bureau of Transportation Statistics shows a dramatic drop in travel in 2020, whether by land or air. Invariably, therefore, Weber cynically took advantage of a hostage courtroom situation.
Additionally, a Bloomberg A report from late last year ominously said restaurant closures had topped 110,000, further aggravating the retail industry. Again, this unfortunate circumstance just happens to bolster WEBR stock and its ilk. But with the pandemic being a one-time event, most potential buyers are probably wondering the same thing: Can this momentum last, or is Weber just a sentimental trap about immediacy bias?
While it’s tempting to counter WEBR’s upside potential as simply being the recipient of a fortuitous circumstance unrelated to the underlying business, the reality is that the harsh lessons of the pandemic may linger. For one thing, this crisis is the first in modern US history where every American has suffered a substantial impact. Second, the Pew Research Center reported that respondents seized on the positive opportunities presented by COVID; namely, closer interpersonal relationships.
While certain segments of society seem to want to tear themselves apart, as HuffPost.com aptly mentioned article, there is perhaps no greater joy than breaking bread with each other. The act transcends race, color, community, religion and any other categorization by which humanity seeks to separate itself.
It is this reconnection to what makes people human that is fundamental to Weber’s stock offering. Even better, the company has proven the viability of sentiment through remarkable financial growth.
How to Buy Weber Stock (WEBR)
The process is simple if you already know how to buy stocks. Otherwise, follow the simple steps below.
Step 1: Choose a brokerage.
When online brokers hit the scene, their customers usually focused on the cost of the platform. Nowadays, the underlying industry has standardized key incentives, such as commission-free trading. Therefore, investors should narrow down their search for the best brokers based on features and access.
Step 2: Decide how many shares you want.
Money management is the key to long-term success in the market and the easiest way to do this is to carefully choose the number of shares. Decide on a balanced number that gives you solid rewards, but also limits your downside if circumstances go wrong.
Step 3: Choose your order type.
Before placing your bet, review the market concepts below.
- Bid: The highest price a buyer will bid, the supply is always less than the ask.
- Ask: The lowest price a seller will accept, demand is always greater than supply.
- Spread: Primarily the difference between the bid price and the ask price, the spread also indicates market liquidity and risk. Tighter spreads imply heavy trading between bulls and bears, thus implying higher liquidity and lower risk. Wider spreads have the opposite implication.
- Limit order: To place a trade at a specific price, place a limit order. This type of order gives you maximum control but no execution guarantee.
- Market order: On the other hand, market orders guarantee execution but at the current rate, which can fluctuate wildly during normal session hours.
- Stop-loss order: A protection mechanism, a stop-loss order automatically exits your position either at a predetermined price or at a price below it.
- Stop-limit order: To take the guesswork out of your exit price, stop-limit orders are only executed at a pre-determined rate. However, these orders carry the same risk of non-execution as limit orders.
Step 4: Execute your trade.
To execute a market order, follow these steps:
- Select your type of action (buy or sell).
- Enter the shares you want to buy (or sell).
- Press the Buy (or Sell) button.
Apply the same sequence for limit orders, but remember to include the desired execution price.
Make profit with WEBR
With the COVID-19 pandemic turning the retail industry into a twisted game of Whac-A-Mole, some sectors – like the restaurant industry – have stumbled badly while others, especially those who deal with personal endeavors, flourished. Fortunately, Weber fell into the latter category. And while the risks associated with the one-time nature of this catalyst exist, the sociological data suggests that the fundamental lessons of the pandemic will resonate beyond the crisis.