Honest Co.’s shares tumbled again on Monday, extending a slide just days after the consumer-goods company started by actress Jessica Alba made a splashy debut in the public markets.
A decline of as much as 13 per cent sent the shares as low as US$16.52, approaching the initial public offering price of US$16 on May 4. After soaring 44 per cent on its first day of trading, the stock declined more than 7 per cent in the next two sessions and was on pace Monday for its third straight drop.
The slump is an inauspicious start for a company looking to capitalize on elevated demand for packaged-goods and cleaning supplies during the pandemic. Alba, who co-founded the direct-to-consumer brand in 2011 and now serves as chief creative officer, brought some Hollywood glamour to the IPO last week with multiple media appearances.
There have been hints that the pandemic boom is starting to subside for packaged goods, with some peers reporting higher costs and uneven demand trends recently. Data and research company New Constructs called Honest “overvalued” and said the stock is “worth no more than US$7” a share.
Honest didn’t immediately reply to a request for comment.