Shein is seeking a US IPO as soon as 2024, despite being known for its controversies.
👉 Background: Fast-fast-fast fashion giant Shein was founded in 2008 and has grown to have more than 100,000 employees... The company also had a lazy US$100 billion valuation by 2020.
👉 What happened: But Shein is also known for its controversy. It has been accused of subjecting workers to dangerous conditions and making them work for 75 hours a week.
👉 What else: That's why some experts raised their eyebrows when Shein announced it was seeking a US IPO as soon as 2024. Experts reckon Shein might have trouble with some ESG investors… And may even fall into the category of 'sinful stocks'.
💡Sinful stocks are stocks that are either involved in immoral or unethical behaviour. Think: gambling, tobacco, porn etc. And now maybe fast fashion's environmental impact and worker conditions too.
💡Stocks like these present investors with a bit of an ethical dilemma: are they okay funding something that might go against their morals? In fact, socially responsible investing is at an all time high. Supposedly, 99% of US millennials interested in sustainable investing.
💡So it's no surprise that sinful stocks are chronically undervalued. Because the riskier the industry, the more likely it’ll face extra regulations and taxes.
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