Casper Sleep Slips Below IPO Price on Second Day as Public Firm
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.
To contact the reporter on this story: Michael Hytha in San Francisco at mhytha@bloomberg.net
To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Sally Bakewell
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