Off and running: Niwot-based Crocs' shares jump 36% in historic shoe IPO - Rocky Mountain News
"Crocs' stock rocked Wednesday at a coming-out party that marked the largest footwear IPO in history.
The Niwot-based company's shares jumped 36 percent to close at $28.55 on its first day of Nasdaq trading under the symbol CROX. Only Denver's Chipotle Mexican Grill has recorded a bigger first-day IPO trading gain this year.
"You guys are two for two," Thomson Financial's Rich Peterson said of Colorado's 2006 IPO successes. "It's probably indicative of (investor) movement toward consumer products."
Raising roughly $208 million, Crocs' initial public offering topped that of any other shoe manufacturer in decades past. In 1993, Nine West's IPO raised $140 million, while Fila Holdings drew $135 million the same year. Reebok and Converse also trailed the size of Crocs' take.
The stock opened at $30 a share, well above the $21 offering price and even a tad higher than a pair of the company's popular shoes, most of which sell at retail shops for about $29.99.
Crocs CEO Ron Snyder and other company executives gathered around computers Wednesday morning on the trading floor of lead banker Piper Jaffray Cos. in Minneapolis to watch the stock begin its ascent.
Snyder described the process of going public as "exhilarating and exhausting" but said he wanted to "get back home and get back to work."
Snyder declined to comment on the company's recent disclosure about weaknesses in its financial reporting. He mainly stuck to scripted statements about the company, referring to regulations that limited his ability to comment during the IPO process.
"The most important thing for us is to continue making great shoes that people love and can't live without," Snyder told the News in a telephone interview.
To mark the occasion, Snyder said he was wearing a new-model pair of "off-road" Crocs introduced recently at the Outdoor Retail Show. "Black ones - the investment banker color - with a red strap on the back," Snyder said.
It was all Crocs on deck for the rest of the company's executive team and for Piper Jaffray employees, who also sported the shoes in a variety of colors on the trading floor.
Crocs was founded in 2002 by a trio of Boulder friends who decided to start a new company to sell a comfortable, slip-resistant and waterproof shoe for boating.
But the colorful resin clogs, sold in a rainbow of bright hues, quickly developed a following among both males and females in a wide range of age groups.
The lightweight shoes soften from body heat, helping them mold to their owners' feet while they are worn. The resin they are made from is antimicrobial, which means the shoes tend not to pick up foot odors after lots of wear.
Given the continued popularity of its shoes in the past few years, observers have high hopes for Crocs.
"They're definitely not a fad," said Madeline Temple, consumer strategist with Iconoculture, a Minneapolis-based research and advisory firm. "They're very much resonating with people."
Temple, who follows fashion trends, says comfort has been the most important factor in Crocs' runaway success.
"Beauty is in the eye of the beholder," she said when asked about those who mock the shoes' odd look.
The company, which plans to use the money raised in the IPO for working capital and to pay off debt, has worked to meet continued strong demand for its shoes. Their popularity has left many stores with limited supplies and long wait times for new shipments.
But Crocs has contracted with a number of third-party manufacturers around the world to supplement its own production facilities.
"We have dramatically ramped up our production over the past year and a half," CEO Snyder said.
Mythbusting
Crocs shoes have inspired their own lore.
• Not good for you: Urban legend has it that lost hikers have eaten the shoes for nourishment. If so, they shouldn't have, because Crocs are made from an antimicrobial resin, with no nutritional value.
• Better fit: Another myth says you can heat up the shoes in the microwave to shrink them. "We'd rather you buy a pair that fit better," a company spokeswoman says."
Read the entire article, Off and running: Niwot-based Crocs' shares jump 36% in historic shoe IPO, written by Joanne Kelley for the Rocky Mountain News at (http://www.rockymountainnews.com/drmn/money/article/0,2777,DRMN_23908_4452053,00.html)
