A blue and white Shark Vacuum on a store display. Shark is one of several house-care brands developed by SharkNinja Operating LLC.
Roberto Machado Noa | Lightrocket | Getty Images
In a year that’s featured very few IPOs, home appliance and vacuum cleaner company SharkNinja debuted on the New York Stock Exchange on Monday, after it was spun off from Hong Kong’s JS Global Lifestyle.
After its listing at just over $30 a share, the stock — trading under ticker symbol SN — rocketed 40% in its first day. But in the four that followed, SharkNinja shares tumbled below their listing price to $26.90 at Friday’s close.
CEO Mark Barrocas described the company in an interview with CNBC on Monday as a “consumer-solving engine.” He said, “we solve problems that others can’t.”
But regardless of how popular the company’s smart vacuums, air fryers and grills may be, the stock’s lackluster performance in its first week points to other problems for investors to consider. Most notably, SharkNinja and other companies that are closely tied to China have to deal with mounting geopolitical tensions between the world’s two largest economies and the exorbitant costs of navigating a strained trade relationship.
As a business, SharkNinja has established itself in the U.S. The company generated revenue last year of $3.7 billion, about flat compared to the prior year but up 35% from 2020, according to a regulatory filing. In the latest reported quarter, 70% of its revenue was in North America.
Shark’s upright vacuums and Ninja’s electric grills each account for 43% of their respective markets in the U.S., the filing showed. From 2019 to 2022, Shark’s robot vacuum market share grew from 15% to 25%.
Meanwhile, vacuum rival iRobot, which Amazon has agreed to acquire, is giving up business. The company said in the risk factors section of its most recent annual filing that “increased competitive pressure has resulted and will continue to result in a loss of sales or market share.” In June, the U.K.’s competition watchdog greenlit Amazon’s planned $1.7 billion purchase of iRobot, which was agreed upon a year ago.
SharkNinja’s gains don’t tell the whole story.
Headquartered in the Boston suburb of Needham, Massachusetts, SharkNinja was a subsidiary of private equity firm JS Global, which is majority owned by its chairman, Xuning Wang, a Chinese citizen based in Hong Kong. JS Global separated the U.S. and China businesses, citing “geographic-specific considerations.”
SharkNinja’s finances remain closely tied to China.
Since 2020, the company has paid out over $3.3 billion to JS Global subsidiaries to obtain the merchandise and goods, mostly made in China, that it sells to American consumers, and to provide “certain procurement and quality control services.” That arrangement will keep going even with SharkNinja’s independence.
“We intend to continue to rely on JS Global for certain supply chain services,” the filing said.
SharkNinja said it paid out a $375 million “special cash dividend” to JS Global for the repayment of debt. Two more dividends, in February 2023, paid out an additional $115.4 million to the firm.
Then there’s the tariff risk. SharkNinja was granted a tariff exemption, which applies to certain goods sent from China to U.S. consumers. That exemption may not necessarily be extended to SharkNinja again, the company warned, creating a “a substantial increase in costs.”
In competing for U.S. customers with brands like Breville and iRobot, SharkNinja has focused heavily on marketing. It’s also run afoul of U.S. intellectual property rules. In March, the International Trade Commission