Goldman Sachs buys $220M in Shein shares to steady IPO

Goldman Sachs bought approximately $220 million worth of Shein shares to intervene after the fast-fashion retailer's stock debut last month. The Wall Street bank acquired 42 million shares, representing 13% of Shein's initial free float, exercising its role as an underwriter to stabilize trading in the open market.

In a filing with the Hong Kong Stock Exchange, Goldman Sachs disclosed that it purchased the greenshoe shares at prices ranging between $4.60 and the initial listing price of $6.24. With an average purchase price of $5.41 per share, the transactions generated an estimated trading profit of approximately $34 million. Goldman Sachs declined to comment on the operations.

Under standard International Capital Market Association agreements, profits resulting from stabilization activities are shared among the underwriting syndicate. In certain past cases, such as the 2021 Deliveroo IPO in London, underwriters agreed beforehand to remit stabilization gains back to the issuer.

Shein's $26 billion IPO tumbled on its first day, sliding as much as 10% before extending losses to 38%. That decline reduced Shein's market valuation to $16.3 billion, down sharply from the roughly $100 billion valuation it attained in a 2022 private funding round. As of June 30, Shein held $15 billion in cash and cash equivalents on its balance sheet, just $1.3 billion below its public market capitalization.