Goldman Sachs Invests $220M to Prop Up Shein Shares After IPO Decline

Goldman Sachs acquired approximately $220 million worth of Shein shares in September to support the company’s stock following its initial public offering (IPO) slump. Acting as the stabilisation manager for Shein’s Hong Kong listing, the bank purchased nearly 42 million shares at prices ranging from HK$35.90 to the IPO price of HK$48.56. These purchases accounted for about 13% of the shares sold during the float.

The bank’s role allowed it to buy shares if the price fell below the offer price. Before trading began on 1 September, filings showed that 41.99 million shares had been lent to the stabilisation manager under a stock borrowing agreement. Shein’s valuation at listing was around $26.5 billion, significantly lower than its near-$100 billion private market valuation in 2022.

Since the IPO, Shein’s shares have dropped about 38% from the offering price, reducing its market value to roughly $16 billion. The Financial Times estimated that the stabilisation trades could have generated around $34 million for the underwriting syndicate, as shares were bought back below the IPO price.

Shein’s shares faced additional pressure after it reported a 67% decline in quarterly profit to $228 million. The company’s profit margin fell to 2.1% from 6.2% a year earlier, attributed to higher freight costs and changes to import rules in the US and Europe. Shein raised around $1.7 billion through its Hong Kong IPO after previous attempts to list in New York and London failed.