NEW YORK (AP) – Shares of Honest Co., the diaper and baby wipe retailer founded by actress Jessica Alba, was up 44% Wednesday on their stock market debut, valuing the company at nearly $ 2.1 billion.
Alba founded Honest Co. ten years ago after using baby detergents that caused her allergic reactions.
In addition to laundry detergent, the company’s other first products were diapers and wipes listed on the Honest Co. were sold. Today, the brand includes moisturizers, mascara, and vitamins. While most of its sales come from its website, it also sells its products in major retailers including Target and Amazon.com.
The company promotes its products using ‘clean’ ingredients, but the company’s image has taken a hit in the past due to product issues. Honest Co. paid $ 7.4 million to settle a 2015 class action lawsuit claiming the sunscreen was ineffective and not natural. as the label said. And earlier this year, it recalled a hot tub that may have been contaminated with infection-causing bacteria.
Los Angeles-based Honest Co. said it sold nearly 26 million shares during the IPO for $ 16 each, raising nearly $ 413 million. It plans to use some of the money to expand and sell its products outside of the US
It has never been profitable. Last year, it posted a loss of $ 14.5 million, less than the $ 31 million loss it reported in 2019. 2020 revenue increased 28% from the year before to $ 300 million.
The stock, which traded under the symbol “HNST” on the Nasdaq, was up 7% to close out at $ 23.
Alba, who starred in “Sin City” and the “Fantastic Four” movies, owns a 6.1% stake in Honest Co. which was worth nearly $ 130 million after the first day of trading.