Coty launches global offering of 33 million shares, eyes Paris listing

Shares of beauty company Coty, Inc. (COTY) trend lower in the pre-market trading session after pushing forward with plans to seek a dual listing on the Euronext Paris stock exchange. Yahoo Finance examines the stock action surrounding the beauty brand and its offering of 33 million shares, live from the Nasdaq MarketSite.

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Video Transcript

- Well, let's pivot to the beauty industry. You can't eat this. Coty shares there are-- and if you are, that's just wrong. Cody shares moving lower this morning by about 3.4%. This comes after the company pushes ahead with selling 33 million new shares as part of a seeking of a dual listing on the Paris Euronext exchange.

Now this is subject to France's market regulator approval. The past couple of years for Coty has been plagued with some management churn and heavy debt as well. The company hoping that this is going to solve their cash flow issues here. And so we're taking a look at shares here on perhaps the just dilution and offering of more shares that are moving lower here, at least in US trading as of right now.

- Yeah, certainly, so we're seeing some movement here on the stock this morning. And it's important to point out that we've seen a similar type of move from other luxury goods producers within the space. When you take a look at LVMH, L'Oreal, Hermes, all trading on Euronext Paris. So Coty certainly following suit there with that selling 33 million shares like you said, worth about $389 million.

Now in terms of what they plan to do with this, they're going to hold a call later on this morning talking about the price, talking about I guess their plans here going forward. But then of course, we're going to get the price in terms of the offering before the market opens on Thursday. Some speculation just about what they're going to do with it when it comes to debt, when it comes to future CapEx plans, when it comes to future investment opportunities within the space because it certainly is very competitive. I was just listing off some of the other names that are already listed on Euronext Paris. When you're taking a look at LVMH, L'Oreal, Hermes, it's a crowded space. Yes, consumers are still spending, especially luxury consumers. But of course, you always have the overhang as to how long that could really last.

- Absolutely, there's some of the context around this too for Coty here. It's actually been a pretty good story as of right now for them raising most recently. And it was actually just last week that we heard from them. This time last week, they had raised their outlook for fiscal year 2024. They were pointing to some of the momentum in their prestige business, strong beauty demand.

Hey, it's me. Prestige fragrances as well. So people out there just wanting to smell good and not funky. And Coty's blockbuster innovation drive upside to the first half of 2024. And their fiscal 24 outlook, that was some of the catalysts that they were pointing to when we heard from them this time last week, perhaps taking some of that momentum as well over to the Euronext exchange.

- Yeah, fragrance is certainly a massive hit there for Coty recently.