Shirlaine Forrest
Your teenage daughter might be crazy over Shein, but potential investors are getting less and less excited.
The backers of the Chinese fast-fashion platform are offering to sell at a 30% discount as demand evaporates amid competition and regulatory scrutiny, Bloomberg reported, citing people familiar with the matter.
Shein investors were trying to sell shares in private market deals at valuations of $45B to $55B last month, down from a valuation of $66B from a fundraising in May, but even at the lower level they haven't been able to find buyers.
Shein had a target of up to $90B in an initial public offering. Shein is facing increasing competition from PDD Holdings's (NASDAQ:PDD) Temu and accusations of copyright infringement from Fast Retailing Co.’s Uniqlo (OTCPK:FRCOF) (OTCPK:FRCOY) to Hennes & Mauritz AB (OTCPK:HMRZF).
The news comes amid a relative drought for initial public offerings, which hit a high in 2021 of more than 1,000 IPOs to last year's 154, according to Stock Analysis.
China’s cyberspace administration, which oversees the internet, is investigating Shein's data handling and sharing practices, a process that could take months, Bloomberg said. U.S. lawmakers have urged the Securities and Exchange Commission to halt the IPO until it verifies the company doesn’t use forced labor.
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