Poshmark Soars in Debut After IPO Fetches $277 Million
Poshmark Considers Pricing IPO Above Marketed Range
(Bloomberg) -- Poshmark Inc., the online marketplace for second-hand goods, rose 142% in its trading debut after raising $277 million in an initial public offering priced above the marketed range.
Shares closed at $101.50 in New York trading Thursday, valuing the Redwood City, California-based company at about $8.5 billion on a fully diluted basis including options and restricted stock units. The company sold 6.6 million shares for $42 each Wednesday, after marketing them for $35 to $39.
The Poshmark IPO follows that of Affirm Holdings Inc., the online consumer lender that almost doubled on its trading debut Wednesday after raising $1.2 billion in its IPO. Affirm shares continued to climb Thursday.
Poshmark, which bills itself as a social marketplace, differentiates itself from competitors by emphasizing interactions among buyers and sellers. Some 74% of the items sold are secondhand, with active users spending 27 minutes on the site each day, Chief Executive Officer Manish Chandra said in an interview.
“I think when people look at us they think about how this can be shopping in a very different way and I think that’s why people are excited about our social marketplace,” Chandra said.
Online resellers are having a bit of a moment with online thrift shop ThredUp Inc. planning an IPO. The RealReal Inc. went public in 2019.
Sustainable Sales
Consumers, particularly from Generation Z, are increasingly buying used items, partly because it’s more sustainable, said Navin Chaddha, a Poshmark board member and managing director at founding investor Mayfield.
While Poshmark was growing before 2020, the coronavirus pandemic accelerated online retail, Chaddha said. He said he was pleased by the first-day trading gains.
“Our philosophy has always been to make money for every investor,” he said, adding that “day one what happens doesn’t really matter.”
The company reserved 330,000 shares in the IPO for sellers on its site and others, according to its filing. About 4,000 Poshmark users were able to buy shares in the IPO, said Hans Tung, another board member and a partner at investor GGV Capital.
Voting Control
Poshmark’s backers, which also include Menlo Ventures and Inventus Capital, will continue to control most of the shareholder voting power, according to its filings.
Petco Health and Wellness Co. also jumped in its trading debut Thursday. The animal supply chain store, backed by investors including private equity firm CVC Capital Partners, climbed as much as 73% after raising $864 million in its IPO.
Poshmark’s listing was led by Morgan Stanley, Goldman Sachs Group Inc. and Barclays Plc. The shares are trading on the Nasdaq Global Select Market under the symbol POSH.
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