Swiss companies hit public listing jackpot
Two of the most successful Swiss company listings of recent times have taken place in the space of a week, raising hundreds of millions of dollars from stock market investors in New York.
Sports shoe manufacturer On Group, which is backed by Swiss tennis star Roger Federer, was valued at more than $7 billion (CHF6.4 billion) when it launched its shares on the New York Stock Exchange on Wednesday. This valuation rose to above $10 billion as the share price soared on the first day of trading.
PLACEHOLDERThe previous day, Sportradar started a new chapter in its history as a Nasdaq-listed company worth $8 billion.
Both firms had good reasons to opt for an initial public offering (IPO) in the United States. Sportradar is taking advantage of recently relaxed sports betting laws that pave the way for more US states to legalise the practice.
The Swiss-based company says it aims to grab around a third of the rapidly expanding US market with its technology that processes sports data for the media and betting industries.
“Ultimately, for any company, the decision of where to go public is a business decision rather than one related to patriotism,” Leti McManus, founder of consultancy firm Tiger Link Advisors, told SWI swissinfo.ch.
This also applies to On Group, which leverages its Swiss quality label and the backing of Federer. The Zurich-headquartered company chose to list on the NYSE because the United States last year became the brand’s largest market with the highest growth in sales.
“The US is the largest sportswear market in the world. A listing there offers a massive opportunity for publicity and media exposure, which means visibility amongst customers and investors,” said McManus. “The NYSE is home to other well-known sportswear brands, such a Nike and Adidas, so it’s no surprise that On wanted to list on the same platform as the big players.”
On Group has seen sales almost triple in the last three years to CHF425.3 million in 2020. But these sums pale in comparison to industry market leaders Nike and Adidas, which dominate the $118.5 billion global sports shoe market.
The sportswear industry as a whole suffered from the Covid-19 pandemic, which closed retail stores around the world, but market research firm Euromonitor expects the sports shoe market to pick up to reach around $180 billion by 2024.
On appears to be following in the footsteps of Nike, which catapulted into the big league in 1984 by designing a basketball shoe endorsed by legendary player Michael Jordan (who is now, coincidentally, a backer of Sportradar). Federer became an On Group investor in 2019 and has helped design a tennis shoe bearing his name.
Back in Switzerland, the main Swiss stock exchange has averaged just under five company listings per year between 2010 and 2020. Operator SIX Group aims to improve on this record by introducing a new share segment, called SparksExternal link, aimed at encouraging some of the country’s nearly 600,000 small and medium sized enterprisesExternal link (with less than 250 employees) to list their stock.
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