Funko IPO Has Worst First Day in 17 Years

Funko logo

A lot of people were surprised when ICv2 reported that Funko, the makers of those cute little blank-eyed pop culture figures, had sales that were “nearly the size of the entire comics and graphic novel business”. They did over $200 million in the first half of this year, although they ultimately ran a loss due to debt and taxes.

This was all leading up to their IPO, their initial public stock offering, which happened last Thursday. Unfortunately, it didn’t go well. Shares dropped 41%, “for the worst first-day showing in 17 years”, according to the NY Times.

Its private-equity owner had extracted more than $100 million in cash from the firm since it went private in 2015, leaving its debt at over $200 million. Funko also lost money in the first six months of the year. A robust holiday season could produce a profit, but it is also questionable whether selling giant-headed dolls of pop-culture figures is a sustainable business.

Is Funko a fad? Their product has immediate widespread appeal, and they are good at locking up all kinds of licenses. They’re available in lots of outlets (so not dependent on any particular store type or chain), but that might mean a glut. It remains to be seen how long the dolls will stick around.

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