- Oat-milk brand Oatly Group (NASDAQ:OTLY) popped more than 30% intraday Thursday following the celebrity-backed company’s eagerly awaited IPO.
- Swedish-based Oatly’s American Depositary Shares opened at $22.12 at around 11:45 a.m. ET and traded as high as $22.74, up 33.8% from the stock’s $17 initial public offering price.
- Shares later pulled back some, but still closed 18.8% higher at $20.20.
- OTLY’s IPO priced late Wednesday at the top of its expected $15 to $17 price range, valuing the company at some $10B.
- The company makes a popular brand of oatmilk and other plant-based dairy alternatives. Oatly counts Oprah Winfrey, rapper Jay-Z, actress Natalie Portman and ex-Starbucks CEO Howard Schultz among its pre-IPO investors. The firm’s institutional backers include Blackstone Group (NYSE:BX) and Rabo Corporate Investments.
- OTLY’s celebrity investors and ecofriendly product have attracted wide attention to both the IPO and the company’s oatmilk.
- CEO Toni Petersson wrote in a letter accompanying Oatly’s F-1 filing that oatmilk manufacturing creates 80% less greenhouse-gas emissions than traditional dairy-milk production does.
- “We stand for things that consumers care about today – sustainability, health and trust,” Petersson wrote. “We created the oatmilk phenomenon from scratch across Europe, China and the United States, and our brand is the primary driver of growth for dairy alternatives. … The momentum for this movement grows every day, as does my confidence in how Oatly is leading it forward.”
- The company reported in its F-1 that revenues soared 106.5% year over year in 2020 to reach $421.4M. That boosted gross profits 94.1% to $129.2M from $66.6M in 2019.
- However, OTLY also said that its net loss to attributable to shareholders rose some 70% to $60.4M in 2020 from $35.6M in 2019:
The company attributed the increased losses to “our continued focus on our growth [and] our continued investment in production, brand awareness, new markets and product development.”
Nonetheless, Seeking Alpha contributor Noah Wilson recently wrote that “Oatly's problematic lack of profitability poses questions that lead me to believe that [the company is] not a worthwhile investment. There simply is not a clear path to profitability.”