Initial public offerings or IPOs are known as a great way for investors to get good returns in a relatively short time. On average, they can bring investors 40% in the first 3 months. Once the initial funding stages are out of the way, IPOs can be a great way for companies to sell their shares on the open market and raise more capital to continue their growth. If you’re a Jessica Alba fan or a mom you’ve likely heard about this company and may have asked, “is The Honest Company publicly traded?” Read on to find out about The Honest Company stock IPO and all the important information about The Honest Company IPO date and price.
The Honest Company History
The Honest Company is an “honestly safe baby and beauty products” company founded in 2011 by Jessica Alba. The famous actress decided to build a company inspired by the birth of her own child in 2008 and out of a desire to create an alternative to mass market baby products that are usually contain harmful substances like petrochemicals and synthetic fragrances. This desire became stronger after she had a welt outbreak from a baby laundry product.
Three years later she found business partners Brian Lee, Sean Kane, and Christopher Gavigan and in 2012 launched the company with 17 products.
The goal of the company, in their own words, is to provide “innovative formulas and thoughtful designs” to beauty and baby products.
In the process of building the business, Alba became an advocate for stricter testing of chemicals in consumer goods on the market.
By 2013 the company’s sales reached $50 million. In the summer of 2014 the business raised $70 million, which, combined with the previous funding of $52 million, gave the company a valuation of $1 billion and put it on course for an initial public offering. During this period Honest products were available at retail stores in the US and Canada.
By November 2014, Honest had almost 300 employees and expected to generate $150 in sales, 80% of them online via a monthly subscription model and the rest via department stores and discount warehouses. The company outperformed the projected sales figure, ending the year with $170 in sales.
After raising several more rounds of founding the question “when is The Honest Company going public?” became more and more relevant, fueled by the massive bull market of 2020, and by January 2021 Bloomberg released a report of a confidential filing to start their IPO process.
Read on to find out about The Honest Company IPO 2021 and other key info.
The Honest Company Public Listing Key Data and IPO Date
The Honest Company IPO Date: May 4, 2021
Ticker: HNST
Exchange: Nasdaq
IPO stock price: $16
Valuation at IPO: $1.44 billion
Market cap (10/3/22): $323.5 million
CEO: Nick Vlahos
Category: Consumer discretionary stocks
The Honest Company launched its IPO on Nasdaq on Tuesay, May 29, 2021 under the stock symbol HNST.
The Honest Company IPO price was set slightly above its midrange at $16 per share and the company raised $412.8 million in the IPO.
This gave Jessica Alba, who owns 15-20% of the company, a net worth of about $200 million at the time of the IPO. Because the stock price has fallen quite a bit since the IPO, Alba's fortune has halved.
So What About Investing Now?
It’s all fun and games during a bull market, but the reality is the HNST stock is almost 80% down since their IPO date, trading at $3.5 as of October 2022. It was still possible to get the textbook 40% return within the first couple of days of the IPO, but the issue is knowing when to sell if you approach it in a speculative way.
In theory, if the market recovers this might be an ideal time to buy low, but this can be said for any decent company and there is far too much uncertainty on the market to bet on this business. This may not stop true Jessica Alba fans who are investors, and if you believe in the company’s values this might be a stock for you.
Investments like IPOs are speculative and much riskier than big companies with proven business models, robust earnings, and potential to scale. One way to avoid losing money on IPOs is to never go over 5-10 percent of your overall investing budget. But nothing beats having a diversified portfolio of stocks that includes the best companies you believe in.
Download Gainy to check out TTF stock collections to invest in themes you like or strategies you want to try, like Healthcare stocks or Monthly Dividend portfolio.
Check out our IPO section to look at other scheduled IPOs. If you want to find companies that match your interests, investment goals and portfolio, try Gainy for some great IPO investment ideas, as well as established blue-chip companies and a variety of other assets.
FAQ
Is The Honest Company a public company?
Yes. The The Honest Company stock IPO date was May 4, 2021. When a company launches an IPO (or initial public offering) this means they become a public company whose shares are traded on the stock exchange.
Is The Honest Company a SPAC?
The Honest Company decided to go for a traditional IPO instead of merging with a special purpose acquisition company (SPAC) — a popular way for companies to go public in 2020-2021.
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