After its introduction on the New York Stock Exchange on Monday, stock in SharkNinja rose, however the stock lost value over the course of the week, settling beneath its initial cost. JS Global Lifestyle, a business located in Hong Kong, split SharkNinja into its own entity. Investors should note that SharkNinja is still deemed a "controlled company" and its affiliation with China carries potential risks.While this year has seen scarcely any IPOs, home appliance and vacuum cleaner company SharkNinja made its debut on the New York Stock Exchange on Monday. Trading at just over $30 a share, the stock initially saw a 40% surge on its first day, but has since retreated to its listing price of $26.90 at the close of business Friday.CEO Mark Barrocas described the business to CNBC as a “consumer-solving engine”, with SharkNinja’s products proving popular. However, this doesn’t reflect the underlying issue of mounting geopolitical tensions between the US and China and the consequential financial strain of a strained trade relationship.SharkNinja saw revenue of $3.7 billion last year, with 70% of that coming from North America. The filing also revealed that their respective upright vacuums and Ninja electric grills each occupied 43% of their respective US markets, and that the company's robot vacuum market share had grown from 15% to 25% between 2019 and 2022.However, rival vacuum business iRobot - which Amazon has agreed to purchase - has fallen prey to increased competition. Still, the U.K. competition authority has approved the $1.7 billion takeover.The parent company of SharkNinja is Hong Kong's JS Global Lifestyle, majority owned by chairman Xuning Wang - a Chinese citizen. The company is based in the Boston suburb of Needham, Massachusetts and JS Global separated its U.S. and China businesses due to “geographic-specific considerations”.
This year has yielded few IPOs, yet home appliance and vacuum cleaner company SharkNinja emerged on the NYSE Monday, with stocks trading initially at just over $30 a share and skyrocketing 40% in the first day. However, since then, the stock has dropped below its original listing price to $26.90 at Friday’s close. CEO Mark Barrocas described the company to CNBC as a “consumer-solving engine”. For the last year, SharkNinja generated revenue of $3.7 billion, 70% of which came from North America. The filing also showed that 43% of US markets for respective upright vacuums and Ninja electric grills belonged to SharkNinja, andthe market for their robot vacuums had grown 15-25% from 2019-2022. Market rival iRobot, which Amazon aims to acquire, is being affected by increasing competitive pressure in the form of lost sales and market shares, yet the U.K. Competition Authority has approved the $1.7 billion takeover. Although SharkNinja is based in Needham, Massachusetts, the parent company is Hong Kong’s JS Global Lifestyle, majority owned by Chinese citizen Xuning Wang. Despite the company’s popularity, the stock’s lackluster performance in its first week points to other potential investors’ concerns, mainly the growing political tension between the US and China, as well as the expensive cost of a strained trading relationship. to prioritize tech
SharkNinja's connections to China remain fairly substantial.In 2020, the company dispersed over $3.3 billion to JS Global subsidiaries to acquire the majoritarily Chinese produced merchandise and goods it sells to U.S. customers, and for the provision of "specific procurement and quality control services.” This partnership is expected to remain in effect despite SharkNinja’s autonomy. According to the report, “We plan to persist in relying on JS Global for certain supply chain services.” In addition, SharkNinja granted JS Global a $375 million “special cash dividend” for the repayment of debt, and doled out two additional payments of $115.4 million in February 2023. Tariffs could potentially lead to an increased cost burden for SharkNinja; the company has already received a tariff exemption but cautions that it cannot guarantee this will be granted again.In aiming to overtake rivals like Breville and iRobot in the U.S., SharkNinja has heavily invested in advertising. The company has also had trouble adhering to U.S. intellectual property laws. iRobot filed a patent violation case against SharkNinja in March, which the International Trade Commission subsequently affirmed. In the firm’s investor pitch deck, Shark Ninja stated that its design and technology teams are situated across the world, including in China. While the present China-U.S. relationship does not bode well for SharkNinja, their policy of dual-sourcing gives them the ability to remain competitive and flexible in light of ever-changing market and economic conditions. The firm’s spokesperson further commented that they “have the utmost respect for IP.” Terrorism and regulatory issues can also expose the company to peril. The Senate approved a bill that requires U.S. companies to alert the Treasury when investing in Chinese technology, and President Joe Biden is likely to sign an executive order that restricts U.S. investment in leading Chinese tech. As for robot vacuums, they have unique safeguards that could incense the Federal Trade Commission, as it is already scrutinizing the Amazon-iRobot partnership because of competition issues.The lukewarm reaction from the public market may be a result of the ongoing tech capital market crisis. After hitting a peak in 2021, the number of IPOs in the US has declined drastically, falling from 416 in 2021 to merely 63 in the first half of 2023. SharkNinja also resorted to an unconventional IPO, as it was spun off and began trading as a separate entity. Jordan Novet of CNBC contributed to this report.
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