Casper Sleep Slips Below IPO Price on Second Day as Public Firm

(Bloomberg) -- Bed-in-a-box seller Casper Sleep Inc., already worth less than half the valuation it reached as a private company, sunk below its initial public offering price on its second day of trading.

Casper shares fell 18% Friday to $11.05 in New York trading, below the $12 offer price in its IPO this week. The New York-based company ended the week with a market valuation of $438 million after being being valued at $1.1 billion in a private funding round last year.

Friday’s decline shows investors have grown skeptical of money-losing unicorns -- startups whose private valuations reached $1 billion or more. The listing followed landmark but largely disappointing performances last year by consumer-oriented companies including Uber Technologies Inc. and its smaller rival Lyft Inc., as well as SmileDirectClub Inc. and Peloton Interactive Inc.

In contrast, PPD Inc., a biotechnology and drug-research services firm that raised $1.62 billion and debuted on Thursday with Casper, priced its shares at the top of its target for the offering and has climbed 15% since its IPO.

Casper, founded in 2014, became one of the leading brands in its niche thanks to its pioneering status and savvy marketing. Since then, a slew of competitors have emerged in the U.S. and abroad. From 2016 to September 2019, Casper spent $422.8 million on marketing, according to an earlier filing.

Casper had 60 stores in the U.S. and Canada as of September. Its sales increased to $312 million for the nine months ended Sept. 30, a 20% gain from the same period in 2018. Its net loss widened to $67 million from $64 million during the same period in 2018.

The company’s backers include Target Corp. and Dani Reiss, the chief executive officer of Canada Goose Holdings Inc.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.