Signa Sees $836 Million Wiped Off Value Since Listing

(Bloomberg) -- Signa Sports United NV has been one of the worst performers on the New York Stock Exchange since its listing last week, with almost $836 million already wiped off the value of the German online retailer. 

Shares in the company have fallen more than a quarter since Dec. 14, giving it a market value of $2.5 billion. They began trading after Signa Sports completed its deal to go public via a merger with blank-check firm Yucaipa Acquisition Corp. 

Even with a 5.2% rise to $7.43 a share on Tuesday, Signa Sports remains the third worst performing stock on the U.S. exchange over the period, according to data compiled by Bloomberg. The S&P 500 index has risen 0.3% since Dec. 14.

“We don’t judge the IPO on such a short-term basis. We’re very confident that our new status as a public company with a broad shareholder base will stand us in good stead over the long term,” a spokesperson for Signa Sports said.

SPAC Redemptions

Signa Sport’s merger with Yucaipa didn’t go entirely as planned. Investors redeemed about 92% of shares in the special purpose acquisition company, or SPAC, reducing the amount of capital available to fund future growth at Signa Sports. The fresh funds raised in the deal were curtailed to $484 million from the initially planned $645 million.

SPAC redemption rates have been climbing more broadly as enthusiasm for the sector wanes in the face of heightened regulatory scrutiny and some high-profile flops.

In October, Yucaipa and Signa Sports secured extra money from private investors to help cushion the impact of such redemptions. Private equity firm Bridgepoint Group Plc, which is selling online sporting goods retailer Wiggle Ltd. to Signa Sports, has also been in discussions about providing funding to support the merger, Bloomberg News reported previously.

“There are some well documented technical factors resulting from the elevated redemption levels observed in recent de-SPACs, in part due to the timing of registering the shares issued to the existing SSU shareholders and our PIPE investors. We are working to register these shares as soon as possible,” the Signa Sports spokesperson said.

Backed by Austrian property tycoon Rene Benko, Signa Sports sells goods for cycling, tennis, hiking and team sports enthusiasts. It runs e-commerce sites under brands including Fahrrad.de, Bikester, Campz, Addnature, Tennis-Point, Outfitter and Stylefile.

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