Our readers know we aren’t in the business of giving financial advice.
But this sure feels like an easy way to get burnt.
Balmuda, the boutique Japanese household electronics company that specializes in toasters and tea kettles, made its debut on the Tokyo Stock Exchange yesterday. Shares skyrocketed 88% on strong demand from retail investors, giving the company a $270 million valuation.
Punching Above Its Weight
Balmuda is a relative minnow in a landscape of Japanese manufacturers such as Toshiba and Panasonic. The company pulled in just over $104 million of revenue last year, and only began selling products outside of Japan and South Korea just this year.
But the company’s design-forward products and playful marketing (which flirts with absurd) has given it a near-mystical quality with consumers (and now investors).
“BALMUDA The Toaster” as the company refers to its toaster SKU, retails for $329 and has quite a value proposition:
- Company founder and designer Gen Terao (who has reportedly been moved to tears over a loaf of bread) has been tweaking the appliance for over 20 years.
- The Balmuda toaster uses a steam cooking method to “envelop the bread, lightly toasting its surface, while keeping its inner moisture and flavor from increasing.”
American reviewers have been impressed. WIRED’s Joe Ray was at first unmoved by the toast, but the design hooked him. “I stuck it on a bookshelf one night when my wife and I had company because I wanted it to be a conversation piece.”
Why It Matters: The real story here is the strength of the IPO market in Japan. More than 25 companies are scheduled to debut by Dec. 31 on Japan’s Mothers market, a NASDAQ-style exchange for startups. That’s a record for this late in the year.