Skims – the company of US reality TV star Kim Kardashian – is forecast to be about to go public, helping to revive IPO activity in the US.
On July 19, Goldman Sachs said investment banking revenue fell 7% in the second quarter. Last quarter’s profit also fell 20% year-over-year to $58.1 billion. “Many activities in investment banking are at multi-decade lows. Our clients are risk-averse,” Goldman Sachs CEO David Solomon said.
Data firm Dealogic also said trading activity globally is at its lowest point in more than a decade. For example, IPOs on the stock market almost disappeared.
Experts say there are still many good companies waiting to go public. They just don’t want to be the first. Once the impasse is cleared, the number of IPOs will be massive.
On CNN, Ro Sokhi, an analyst at consulting firm UHY, said shares of Cava — a Mediterranean restaurant chain — have risen more than 27% since its IPO. However, “Cava is not enough to clear the flow.”
Hope now lies in Skims, which is a fashion house Kim Kardashian co-founded in 2019. She was born in 1980 in the US, known for her reality TV show Keeping Up With The Kardashians. Over the years, she rose to fame in Hollywood with hundreds of millions of followers via social media. Kim has also featured in many films. According to Forbes, Kim is currently worth $1.7 billion.
In its latest funding round, Skims raised $270 million, valuing the company at $4 billion. In total, Skims has raised $670 million in funding over the past 4 years.
Wellington Management — the company known for taking businesses public — led the latest round of funding into Skims. Skims also recently hired a Chief Financial Officer. This is a common sign of an impending IPO.
On news site Dealbook, Skims CEO Jens Grede said investors are interested in consumer companies like Skims. So an IPO is what this company wants. “In the future, Skims will become a public company,” he said.
Sokhi said that if Skims IPO is successful, “companies, CFOs and investors will see this as a very positive signal.” “Investors will see that there are still opportunities out there,” he said. This is the development of 2021 – the year of booming global deals.
However, Megan Penick – lawyer at law firm Michelman & Robinson believes that companies like Skims are unlikely to create an IPO wave, especially for businesses focusing on science and technology that are not famous. “Until investors are willing to open their wallets and be less cautious, we will not have an IPO storm,” she affirmed.