Health, Wellness & Biotech IPO Public Markets

J&J’s Consumer Spinoff Kenvue Closes Trading At 22% Above Asking Price

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Johnson & Johnson’s consumer health spinoff, Kenvue, just solidified its place as the biggest U.S. IPO debut in over a year.

Kenvue’s shares traded at $26.90 each when the market closed on Thursday, a 22% jump from the company’s original asking price of $22, which was in the high end of the range. When it debuted, shares were trading at $25.60.

The company sold 172.8 million shares — an increase from the 151 million it planned on selling. Kenvue raised $3.8 billion from the offering and its valuation jumped from $48 billion at the start of trading to $50 billion when the market closed.

Back in 2021, Johnson & Johnson announced it would split its pharmaceutical brand from its consumer health division, marking one of the biggest changes to its 100-year history. Kenvue, the consumer health arm that owns a slew of household names like Tylenol, Band-Aid and Neutrogena, announced last week it would brave the icy public markets and go public. 

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Johnson & Johnson is still a majority shareholder in Kenvue, representing a 90.9% stake in the company and owning 1.7 billion shares of common stock.

Sign of a bustling public market ahead?

Kenvue’s blockbuster debut may be a sign that the public markets are thawing. There was an unprecedented number of startups that went public in 2021, but the market chilled considerably in 2022. 

Last year, Getty Images raised $1.9 billion when it debuted back in July, while marketing platform System1 raised $518 million a few months earlier in January. They were part of a mere 91 startups that went public in 2022, per Crunchbase data. By comparison, over 400 startups debuted on the stock market in 2021 and 190 debuted in 2020.

In 2022, several companies scrapped or paused their IPO plans as the economic health of the U.S. became more uncertain, but it’s clear many are waiting for the right time to go public. Both fast-fashion retailer Shein and fintech platform Stripe are reportedly in talks to explore IPO options no later than 2024.  

Startups, after raising huge rounds at high valuations in 2021, are looking for ways to extend their runways. And the banking crisis that killed Silicon Valley Bank and rippled out is only causing more uncertainty for risky startups that don’t often meet banks’ loan requirements. 

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Illustration: Dom Guzman

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