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Shein's Confidential IPO Filing Put These ETFs in Focus
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Shein, the Chinese-founded fast-fashion giant, has confidentially filed for an initial public offering (IPO - Free Report) in the United States, signaling its intent to expand its global presence. This move comes as the company aims to build on its last valuation of $66 billion and potentially commence public trading as early as 2024, according to sources familiar with the matter, as quoted on CNBC (read: Stocks Responsible for the Latest Rally in IPO ETF).
Valuation Uncertainty and SEC Interaction
The current valuation of Shein remains uncertain, sparking ongoing debates between the company and its advisors. A confidential filing, common in such cases, enables Shein to engage with the U.S. Securities and Exchange Commission (SEC) privately and make necessary adjustments to its filings.
Over the next few months, Shein is expected to refine its paperwork and address inquiries from the regulatory agency. The filing will become public when Shein is ready to proceed with its IPO, along with any associated SEC communications and document modifications.
Shein's Meteoric Rise and Controversies
Shein has experienced remarkable growth in recent years, captivating global consumers with its trendy designs and competitive prices. Shein has partnered up with former rival Forever 21 to unveil a co-branded clothing line that will see Shein design, manufacture and distribute the clothes mainly on its website. Shein has been hosting pop-up events inside of Forever 21′s stores.
However, the company has encountered several challenges, including allegations of forced labor in its supply chain, violations of labor laws, environmental concerns, and accusations of design theft from independent artists.
Congressional Investigations and Scrutiny
The House Select Committee on the Chinese Communist Party is currently investigating Shein, and the company's ties to Beijing have come under scrutiny. Multiple lawmakers, including 16 Republican attorneys general, have urged the SEC to ensure that Shein's supply chain does not involve forced labor before allowing it to trade publicly in the U.S.
Shein's Response and Leadership Changes
Shein has been cooperating with lawmakers and has taken steps to address forced labor concerns. The company has undergone significant changes, with former SoftBank CEO Marcelo Claure joining as group vice chair. Additionally, Shein has made efforts to engage with the public through pop-up events, public relations campaigns, and interactions with the media.
Strategic Moves and Partnerships
Shein's acquisition of a stake in Sparc Group, a joint venture including Authentic Brands Group and Simon Property Group, has provided the company with a strong U.S. ally. This partnership also led to a co-branded clothing line with former rival Forever 21, enhancing Shein's presence in the U.S. market.
Trust-Building Challenges
Despite these efforts, Shein still faces challenges in gaining the trust of U.S. regulators. CEO Sky Xu remains a mysterious figure who does not grant interviews or speak publicly about the company, which is unusual for publicly traded firms in the United States.
ETFs in Focus
Below we highlight few such ETFs that should be tracked in light of Shein’s likely IPO.
The underlying Renaissance IPO Index is a portfolio of newly U.S.-listed initial public offerings of companies whose unseasoned equities are under-represented in core U.S. equity indices. IPOs that meet liquidity & operational screens are included in the Index at the end of the fifth day of trading, or upon quarterly reviews, weighted by tradable float, capped at 10% & removed after two years. The fund charges 60 bps in fees.
First Trust US Equity Opportunities ETF (FPX - Free Report)
The underlying IPOX-100 U.S. Index is a modified value-weighted price index measuring the performance of the top 100 companies ranked quarterly by market capitalization in the IPOX Composite U.S. Index. The IPOX Composite U.S. Index is a rules-based value-weighted index measuring the average performance of U.S. IPOs during their first 1,000 trading days. The fund charges 60 bps in fees.
This ETF is active and does not track a benchmark. The Franklin Disruptive Commerce ETF seeks capital appreciation by investing in innovative companies benefitting from transformation in the e-commerce space. The fund charges 50 bps in fees.
The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales. The fund charges 65 bps in fees.
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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Shein's Confidential IPO Filing Put These ETFs in Focus
Shein, the Chinese-founded fast-fashion giant, has confidentially filed for an initial public offering (IPO - Free Report) in the United States, signaling its intent to expand its global presence. This move comes as the company aims to build on its last valuation of $66 billion and potentially commence public trading as early as 2024, according to sources familiar with the matter, as quoted on CNBC (read: Stocks Responsible for the Latest Rally in IPO ETF).
Valuation Uncertainty and SEC Interaction
The current valuation of Shein remains uncertain, sparking ongoing debates between the company and its advisors. A confidential filing, common in such cases, enables Shein to engage with the U.S. Securities and Exchange Commission (SEC) privately and make necessary adjustments to its filings.
Over the next few months, Shein is expected to refine its paperwork and address inquiries from the regulatory agency. The filing will become public when Shein is ready to proceed with its IPO, along with any associated SEC communications and document modifications.
Shein's Meteoric Rise and Controversies
Shein has experienced remarkable growth in recent years, captivating global consumers with its trendy designs and competitive prices. Shein has partnered up with former rival Forever 21 to unveil a co-branded clothing line that will see Shein design, manufacture and distribute the clothes mainly on its website. Shein has been hosting pop-up events inside of Forever 21′s stores.
However, the company has encountered several challenges, including allegations of forced labor in its supply chain, violations of labor laws, environmental concerns, and accusations of design theft from independent artists.
Congressional Investigations and Scrutiny
The House Select Committee on the Chinese Communist Party is currently investigating Shein, and the company's ties to Beijing have come under scrutiny. Multiple lawmakers, including 16 Republican attorneys general, have urged the SEC to ensure that Shein's supply chain does not involve forced labor before allowing it to trade publicly in the U.S.
Shein's Response and Leadership Changes
Shein has been cooperating with lawmakers and has taken steps to address forced labor concerns. The company has undergone significant changes, with former SoftBank CEO Marcelo Claure joining as group vice chair. Additionally, Shein has made efforts to engage with the public through pop-up events, public relations campaigns, and interactions with the media.
Strategic Moves and Partnerships
Shein's acquisition of a stake in Sparc Group, a joint venture including Authentic Brands Group and Simon Property Group, has provided the company with a strong U.S. ally. This partnership also led to a co-branded clothing line with former rival Forever 21, enhancing Shein's presence in the U.S. market.
Trust-Building Challenges
Despite these efforts, Shein still faces challenges in gaining the trust of U.S. regulators. CEO Sky Xu remains a mysterious figure who does not grant interviews or speak publicly about the company, which is unusual for publicly traded firms in the United States.
ETFs in Focus
Below we highlight few such ETFs that should be tracked in light of Shein’s likely IPO.
Renaissance IPO ETF (IPO - Free Report)
The underlying Renaissance IPO Index is a portfolio of newly U.S.-listed initial public offerings of companies whose unseasoned equities are under-represented in core U.S. equity indices. IPOs that meet liquidity & operational screens are included in the Index at the end of the fifth day of trading, or upon quarterly reviews, weighted by tradable float, capped at 10% & removed after two years. The fund charges 60 bps in fees.
First Trust US Equity Opportunities ETF (FPX - Free Report)
The underlying IPOX-100 U.S. Index is a modified value-weighted price index measuring the performance of the top 100 companies ranked quarterly by market capitalization in the IPOX Composite U.S. Index. The IPOX Composite U.S. Index is a rules-based value-weighted index measuring the average performance of U.S. IPOs during their first 1,000 trading days. The fund charges 60 bps in fees.
Franklin Disruptive Commerce ETF (BUYZ - Free Report)
This ETF is active and does not track a benchmark. The Franklin Disruptive Commerce ETF seeks capital appreciation by investing in innovative companies benefitting from transformation in the e-commerce space. The fund charges 50 bps in fees.
Amplify Online Retail ETF (IBUY - Free Report)
The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales. The fund charges 65 bps in fees.
ProShares Online Retail ETF (ONLN - Free Report)
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)