Investments

Casper Warns Social Media Celebs Could Pose Investment Risk

U.S. mattress-in-a-box company Casper has underscored the increasing power of social media influencers to propel or hinder brands. The firm, moreover, cited its own digital advocates as a potential risk factor to its initial public offering (IPO).

Launched in 2014, the company shot to immediate online fame when celebrity Kylie Jenner with more than 150 million followers on her Instagram account featured Casper photos, and positively reviewed the company. Preparing for an IPO last Friday (Jan 10), Casper cautioned investment backers that the company was powerless over any future influencer messaging, and that lack of control could consequently put investor money at higher risk.

“Use of social media and influencers may materially and adversely affect our reputation,” the company said. “Influencers with whom we maintain relationships could also engage in behavior or use their platforms to communicate directly with our customers in a manner that reflects poorly on our brand, and may be attributed to us or otherwise adversely affect us.”

Influencer marketing has grown significantly to “an $8 billion business as celebrities, experts” and other individuals with large social media followings charge companies high prices to promote products. Casper noted that influencers could “subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties” that could negatively impact its financial health.

“If we are not able to develop and maintain positive relationships with our network of over 3,500 influencers, our ability to promote and maintain awareness of our sites and brands, [as well as] leverage social media platforms to drive visits to our sites, may be adversely affected,” the company added.

Children have become significant influencers, so much so that an industry summit was initiated last year to discuss the current lack of regulation in the powerful influencer community.

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