When mattress company Casper debuted its shares in an initial public offering (IPO) on Thursday (Feb. 6), they rose to a nearly 13 percent above asking price, according to a report by the Financial Times.
However, the shares still fell short of what bankers targeted a week ago. Shares hit $15.36 at the start of trading, before equalizing to about a 12.5 percent gain at $13.50.
The company suffered a large valuation cut – going from $1.1 billion to $467 million – but it did illustrate that investors will buy stocks if they feel the price is right. Casper is also skeptical of high prices after high-profile companies like Uber, Lyft and WeWork saw IPO flops last year.
Casper has posted $233 million in losses since 2017, and its 8.35 million shares were priced at $12 each, which is the lower range of the $17 to $19 the company had targeted. This shows that despite having a $1 billion valuations, there are no guarantees with IPOs, especially in the current climate.
Although Casper has several notable investors, including celebrities like Leonardo DiCaprio and rapper 50 Cent, there are hundreds of other companies with similar products on the market.
Casper’s $1 billion valuation came through a $100 million fundraising round in which New Enterprise Associates, Target and Institutional Venture Partners participated. However, public markets do not always follow investors’ whims.
Co-founder and CEO of Gerber Kawasaki Wealth and Investment Management Ross Gerber said Casper could be seen in the same vein as other big companies that were recently listed but failed to attract enough interest. “We’ve seen this from Silicon Valley for years. This is another example of a company in desperate need of money,” Gerber said.
Casper will trade under the ticker symbol "CSPR" on the NYSE. The company also plans to move beyond mattresses and focus on sleep and wellness.
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