The Tribe of Levi
Zac Brown famously sings: “You know I like my chicken fried / cold beer on a Friday night / a pair of jeans that fits just right / and the radio on.”
Apparently, Brown isn’t the only one that likes a pair of jeans that fits just right. Levi Strauss & Co., more commonly referred to as “Levis,” are going public, and the demand is smashing expectations.
Initially, the company was expecting to sell close to 37 million shares valued between $14-$16 dollars, in pursuit of an IPO that is expected to about $675 million, which would result in a valuation of $5.8 billion.
That alone was a strong statement. In 2019, retailers are not going public. This was expected to be the year of tech IPOs, with booming start-ups like Uber, Lyft, Slack, and others all expected to go public before the end of the year.
Retailers, on the other hand, have been moving in the opposite direction. Scared of what Amazon has done and continues to do to brick-and-mortar stores, many retailers are opting to go private. But Levi Strauss bucked that trend, and they’re being rewarded for it heavily.
The IPO is now expected to exceed the initial demand, with buyers reportedly oversubscribed more than ten times to the shares that were offered. The company may move the price per share up to $17 as a result, a whole dollar above their initial price range.
This would result in an IPO size of $623 million and a resultant valuation $6.6 billion. That would obviously be a huge boon for the company, as it would mean a valuation uptick of about $800 million from what was expected.
The market is always volatile, and there’s no certainty that these projections will come true when Strauss actually hits the market on the 22nd, but it’s an encouraging forecast for a company that is boldly bucking the trends.
Hall & Oates once sang “I think I’ll trade my Levis for some new Bermuda shorts / ‘Cause my wife and kids don’t wanna see their daddy / be a hippie no more.”
Turns out they were wrong. Levis were and are the wave of the future.