Shein targets $90 billion IPO valuation amid market optimism

Fast fashion giant Shein is making headlines as it confidentially files for an initial public offering (IPO) that targets a staggering $90 billion valuation on US stock exchanges. This ambitious move by the China-based online retailer is set against a backdrop of stringent Chinese regulation and economic slowdown, which have impacted U.S.-listed Chinese stocks.

Despite the challenging environment and mixed fortunes for recent IPOs, Shein’s valuation marks a significant increase from its mid-2023 funding round, where it was valued at $66 billion. The company’s preparation for an IPO is noteworthy given the controversies it faces, including allegations of forced labor and copyright violations. These issues have raised concerns among environmental, social, and governance (ESG) investors.

Wall Street, however, appears optimistic about the potential for a positive shift in US market sentiment. In 2023, US IPOs have only raised $23.6 billion, a sharp decline from the $300 billion peak in 2021. Yet, there are signs of recovery as companies like Arm Holdings (NASDAQ:) and Birkenstock (NYSE:) have performed well post-IPO. Additionally, Reddit is planning its own IPO with an estimated valuation of $15 billion as market forecasts suggest a trend towards all-time highs.

Shein’s entry into the public market could be transformative for retail investors who typically gain access to new listings post-IPO through trading platforms connected to US stock markets. High net-worth individuals often have pre-listing access via brokers such as Goldman Sachs and JPMorgan Chase (NYSE:).

The fast fashion leader, which has been a major player since its inception in 2012, is navigating the complexities of the global financial landscape while capturing investor interest amidst a cautious but recovering IPO climate.

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