Lionel Messi’s MGO Clothing Line Drops in Trading Debut After Initial Pop
(Bloomberg) -- MGO Global Inc., which manages the clothing and lifestyle brand of football star Lionel Messi, plunged in its initial trading session after earlier more than tripling in price, the latest in a series of wild debuts for US small-cap listings.
Shares jumped 232% during their first 90 minutes of trading after MGO's initial public offering raised $7.5 million. But by early afternoon, the stock had completely erased the run up and fell below the $5.00 offering price. About 14.2 million shares changed hands during the volatile session, which closed with the stock down 7%.
Dramatic debuts like MGO have become increasingly common among small-cap listings. In fact, last year's pattern of pops and ensuing selloffs sparked a warning of potential fraud from regulators and stock exchanges. Still, the potential for quick gains tends to lure significant retail interest, not unlike the meme-stock frenzy of recent years, according to Matt Michel, chief executive officer of InvestorLink Capital Markets
“Unless and until you have a good balance of institutional and retail capital around a transaction, you can get volatility like this because there's no one sticking around saying ‘I've done the work and I'm here for the long term.'”
A spokesperson for MGO didn't respond to a request seeking comment.
Messi, the linchpin of the Argentina's World Cup triumph last month in Qatar, is not a disclosed shareholder in MGO, instead receiving royalty payments that comprise 12% of net sales, according to the IPO filing. MGO cites contributors from his hometown of Rosario, as well as more notable fashion hubs London and Barcelona.
The company was founded in 2018 and launched its flagship Messi Brand in 2019. It generated a net loss of $906,326 in 2021 on $880,000 of revenue, according to the filing.
The firm was co-founded by Ginny Hilfiger, the youngest sibling of fashion designer Tommy Hilfiger. She holds about a 30% stake in the firm following its IPO, according to the prospectus.
Boustead Securities and Sutter Securities underwrote the share offering.
--With assistance from and .
(Updates with closing prices, additional details)
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