Acushnet's IPO Is a Mixed Bag

Acushnet -- that's Titleist and FootJoy, in case you didn't know -- went public on the stock market Friday. According to the reports, the results were mixed.



The Golf Digest report said this:

The initial offering price was $17 per share with just under 20 million shares of common stock to be sold by existing shareholders of Acushnet, which was bought by Fila Korea and a consortium of Korean banks in 2011. The underwriters have a 30-day over-allotment option to purchase up to an additional 2.9 million shares. J.P. Morgan and Morgan Stanley are lead book-running managers and representatives of the underwriters for the initial public offering. The offering is expected to close on Nov. 2.

The first day of trading saw a little more than 6.9 million shares change hands with a day’s range of $16.90 and $18.00. At the close of trading the stock was at $17.95.

Now whether that's good or not depends on who you talk to. Fortune's report called it "Par—with a substantial handicap." CNN Money's article was less kind; their summary was entitled "Shanked! Titleist IPO lands in the rough" and their article concluded by saying "At best, the stock is a double-bogey."

Of course, given the number of recent IPOs that have opened very high and then fell, sometimes dramatically -- for example, Forbes called last year's Twitter IPO a failure -- I'm not sure Acushnet did so bad. Initial estimates called for the stock to open at $21-24; imagine the outcry if it had sold for that and THEN fell! At least the stock hadn't lost anything by the end of the session.

What I found most interesting in the articles mentioned above -- especially the Golf Digest piece -- was probably lost on most of those buying stock. Acushnet's COO David Maher, who's been with the company for 25 years, said that he believes the USGA, R&A and the golf equipment companies are largely on the same page now, and that most of the "imbalances" in the golf equipment businesses (he's talking about overstock and making too much new equipment too soon for the market) have been corrected. He says Acushnet isn't worried about the slow first day because they're in this for the long haul.

Given that Acushnet has been around since the 1930s and has managed to stay afloat through some pretty bad times, I find it hard to be all that pessimistic about their first day. Time will tell, I guess.

But if you're interested in watching Acushnet's progress, its trading symbol is GOLF. What else?