Honest Co. Extends Post-IPO Slide, Wiping Out Gains Since Debut

(Bloomberg) -- Honest Co.’s stock slump deepened as the consumer-goods company started by actress Jessica Alba fell below the price set in an initial public offering just last week.

The shares tumbled as much as 8.2% to $15.30 Tuesday morning in New York, dipping for the first time below the $16 IPO price on May 4. After gaining 44% in the first day of trading, the stock has lost about a third of its value.

The slump is an inauspicious start for a company looking to capitalize on elevated demand for packaged-goods and cleaning supplies during the pandemic. Alba, who co-founded the direct-to-consumer brand in 2011 and now serves as chief creative officer, brought some Hollywood glamour to the IPO last week with multiple media appearances.

There have been hints that the pandemic boom is starting to fade for packaged goods, with some companies in the space reporting higher costs and uneven demand trends recently. Data and research company New Constructs called Honest “overvalued” in a recent report and said the stock is “worth no more than $7” a share.

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