Despite a second downward adjustment to the American initial public offering for the Wanda Sports Group, the company’s president and vice chairman likened the US market to the Ironman Triathlon, the famed endurance sports event that is part of the group’s portfolio holdings.
Wanda Sports, a unit of Chinese conglomerate Dalian Wanda, made its debut on the Nasdaq stock market in the US on July 26 with a revised share price of $8 and total IPO of $190.4 million (€171.6 million). The figures are down sharply from prior share targets of $9-11, and $12-15 before that, and a planned total offering that began at $500 million and was reduced earlier this week to $308 million.
The number of shares offered also steadily fell from 33.33 million to 28 million and finally 23.8 million.
But Philippe Blatter, Wanda Sports Group president and also president and chief executive of the company’s Swiss-based sports marketing firm Infront Sports & Media, said today’s IPO was merely the beginning of what is intended to be a long-term global journey for the newly reorganized company. Dalian Wanda spent nearly $1.9 billion collectively to acquire Infront and World Triathlon Corp., producer of the Ironman.
“What we have in mind is a long-term strategy. I like to make an analogy to the beginning of Ironman racing,” Blatter said. “For the swimming, I might want to be out of the water and on the bike in one hour. But it might take 1 hour, 15 minutes, or 1 hour, 20 minutes. But that has not brought me down. I still have the one goal and it’s the finish line, and whatever is needed to get to that finish line. It’s the same here, and it’s important to focus on the implementation of our strategy and focus on delivering value to our clients.”
Blatter said some of the downward shifts also owed to both investor response during the company’s pre-IPO roadshows, as well as some larger macroeconomic and political trends.
“I can’t control some of these things, but I can control our strategy and our plan, and that’s what I focus on,” Blatter said.
Trading for the new Wanda Sports Stock began in the afternoon of July 26, and quickly sank more than 25 percent below the twice-revised $8 per share IPO price and was trading for less than $6 per share. The stock ultimately closed a rugged first day of trading at $5.16 per share, down 36 pct from the twice-reduced IPO price.
The funds generated by IPO will be used to repay a loan connected to the restructuring of the group, as well as investments and general corporate use.
More broadly, Blatter said the IPO achieves several key goals for Wanda Sports. In additional to providing increased credibility and transparency in the market and helping fund corporate expansion, the move is also designed to help expand the company’s profile globally and particularly in the US.
The company already has several touchpoints to the US market through not only the Ironman brand, but the Ironman’s Rock ’n’ Roll Marathon series and Infront’s Omingon’s digital agency that works with numerous sports entities.
“This opens doors to us to potential sports clients that we might not have automatically had coming out of Europe,” Blatter said.
Wanda Sports Group posted a $61.9 million (€54 million) profit for 2018, down 31 percent from the year prior. More recently, the company reported a loss of $9.7 million (€8.6 million) for the first quarter of 2019.