The Rising Influence of Rising Affluence

[DewDiligence]

COTY falls 3% in first day of trading:

http://finance.yahoo.com/news/beauty-company-coty-falls-market-143403866.html

Shares of perfume and beauty products seller Coty Inc (COTY) fell more than 3 percent in their market debut on Thursday, taking the gloss off the third-largest U.S. IPO this year.

…The company gets most of its revenue from perfume brands including Calvin Klein, Davidoff and Playboy as well as those it sells under the names of celebrities such as Beyonce Knowles, Lady Gaga and Jennifer Lopez.

…Coty, founded in 1904 by Francois Coty in Paris, filed to go public in June 2012 after dropping a $10.7 billion takeover bid for larger peer Avon Products Inc (AVP)…

…analysts said Coty has let rivals such as Avon and Estée Lauder Cos Inc (EL.N) beat it to fast-growing markets in Asia and Latin America. While Coty has made a number of deals in recent years to expand into overseas markets such as China and bolster its skin-care offerings, its chief executive told Reuters that dealmaking was not essential.

…Coty did not receive any proceeds from the offering as all of the shares were sold by selling shareholders, including the billionaire Reimann family of Germany.

COTY ought to be a strong beneficiary of The Global Demographic Tailwind; however, there are company-specific problems starting with the fact that the dual-class common stock enables the three largest shareholders to have an overwhelming majority of the voting equity.