Oatly Rallies On Nasdaq Debut: What Investors Need To Know

Swedish oat milk maker Oatly Group AB (NASDAQ: OTLY) opened for trading Thursday after announcing an initial public offering on of 84.4 million American Depositary Shares priced at $17 a share, on the high end of expectations.

Oatly’s IPO raised $1.43 billion, and the $17 share price gives the company a $10-billion valuation.

The stock was trading 26.08% higher to $21.43 at last check. 

Oatly's IPO Timing: The IPO pricing is a positive sign for Oatly. Recently, as the stock market has dipped, investors have been shying away from growth companies that go public, as reflected in the 4.8% fall in May of the Nasdaq Composite Index, which is full of growth companies.

Both Oatly and its lead underwriters Morgan Stanley, JPMorgan Chase & Co. and Credit Suisse expect the company to avoid the weakness of the broader market since the company is a consumer name as opposed to a technology company.

Oatly CEO Toni Petersson told Forbes: “We’re going to use the proceeds to expand our production capacity. That’s why the time is right now. Now is the time. It is perfect for us from a business perspective.”

Oatly's Market, Financials: Oatly is backed by celebrity investors Oprah Winfrey and Natalie Portman, as well as leading global investment firm Blackstone Group Inc. (NYSE: BX) and lead investor Verlinvest.

Oatly has 53% market share for alternative dairy products in Sweden, where the company was founded in 1994. The company is the world’s largest oat drink company, with $140.1 million in revenue for the first three months of 2021, up 66.2% year-over-year.

Oat milk’s popularity has risen dramatically recently due to a shift among consumers toward more plant-based foods.

Yet the company’s losses have increased, according to regulatory filings. In 2020, its net loss was $60.4 million, up from $35.6 million in 2019. Revenue is also rising: in 2020, it increased to $421.4 million, up from $204 million in 2019.