Jim Cramer Advises Investors To Steer Clear Of Amer Sports Amid 'Hit Or Miss' IPO Market: 'The Kind Of Deals I Wish We Aren't Seeing'

In a recent episode of CNBC’s “Mad Money,” host Jim Cramer warned investors to stay away from the initial public offering (IPO) of Amer Sports, citing the company’s “less than ideal” balance sheet.

What Happened: Amer Sports, the parent company of renowned sports brands such as Wilson and Arc’Teryx, saw its IPO debut on Thursday, reported CNBC. Despite the company’s initial stock price of $13.40 per share, which resulted in a $6.3 billion valuation, Cramer advised against investing in it. The company had initially aimed for an $8.7 billion valuation.

Cramer highlighted Amer Sports’ substantial debt of $2.1 billion, describing its balance sheet as “less than ideal.” He also raised concerns about the company’s overreliance on the Chinese market and the potential impact of the country’s economic struggles.

"So far, this is looking like another out of favor IPO, even if its lowball price allowed the stock to get a like, I guess you could call it a decent pop," he said.

"And, I've got to tell you, Amer Sports is a great example of the kind of deals I wish we weren't seeing."

Despite acknowledging Amer Sports’ recent growth, Cramer attributed much of it to the lifting of lockdowns in China, which he deemed as unsustainable.

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Why It Matters: Amer Sports’ IPO is the latest in a series of IPOs that have failed to meet market expectations. This trend has raised concerns about the overall health of the IPO market.

Earlier in January, Shein’s backers struggled to offload shares at a 30% discount, casting doubts over the company’s much-anticipated IPO in the U.S. Companies such as Volkswagen have postponed their IPOs due to concerns about the electric vehicle (EV) market.

The IPO market has been experiencing significant turbulence since 2021, with the valuations of numerous companies debuting on the U.S. stock market dropping by 63%. This volatility has been a cause for concern in the venture capitalist community.

Despite this, Amer Sports’ IPO took place on the NYSE exchange under the ticker AS. The company offered shares at an expected price between $16.00 and $18.00 per share with an insider lock-up period of 180 days ending on July 30. This development was closely watched as it was seen as a barometer for the health of the IPO market.

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