- Shein's stock tanked by as much as 10% on Tuesday but recovered to close to its HK$48.56 issuance price.
- On Wednesday, shares slipped more than 3% and were trading at HK$46.94 in early trade.
Shein's shares dropped more than 3% on Wednesday, following a lacklustre IPO debut that saw the stock plummet nearly 10% on its first day. The stock was trading at HK$46.94 in early trade, down from its issuance price of HK$48.56.123
The online fast-fashion retailer raised $1.7 billion in its IPO, valuing the company at $26.5 billion, a stark contrast to its peak valuation of nearly $100 billion in 2022. Analysts attribute the weak performance to higher import duties, growing regulatory risks, and intensified competition from rivals, which are hampering Shein's growth.
Brandon Ho, head of investment advisory for Singapore at Arta Finance, noted, “Shein's weak performance reflects investors reassessing a growth story that has become harder to underwrite.” He added that revenue growth has slowed in recent years, with margins under pressure due to higher tariffs and customs costs in the U.S. and EU, weakening the economics of its low-cost cross-border model.
“The stock had tanked by as much as 10% on Tuesday before recovering to close near its HK$48.56 issuance price. Early Wednesday, it traded at HK$46.94, reflecting continued investor caution after the long-awaited listing.”
