Casper Sleep priced its initial public offering on Wednesday at $12 per share — the low end of its expected range — as it became the latest startup to have its big ambitions dashed by the stark realities of an unforgiving market.
The pricing of over 8 million shares raised just over $100 million for Casper, and comes after the mattress startup unexpectedly cut the range for the offering to $12-13 per share. The rock-bottom price suggests Casper is falling prey to the same lowered expectations that eventually humbled 2019’s class of marquee IPOs.
All eyes will be on the stock after Thursday’s opening bell, when Casper begins trading under the symbol “CSPR” on the New York Stock Exchange.
Casper once occupied the same strata as other “unicorns,” or startups valued above $1 billion, but is now somewhere near $700 million. The IPO’s reception is an effective temperature read for other Silicon Valley hopefuls like Airbnb that may also go public this year.
According to its regulatory filing, Casper is hoping to raise just under $125 million with its IPO, and hopes to capitalize on the growing emphasis on health and wellness — estimating the “global sleep economy” is worth about $432 billion. Last year, the company raised over $300 million from a list of big name investors, including actor Leonardo DiCaprio, rapper 50 Cent and retail giant Target (TGT).
However, investors have laid siege to a wide range of companies with lofty visions and valuations — but no actual profits. Casper reported $312.3 million in revenue in the first nine months of last year, but lost over $67 million as it expanded its retail footprint, and spent lavishly on marketing to fend off challenges from competitors like Sleep Number (SNBR).
The long and growing list of newly-minted public companies that have tumbled sharply since their debuts include Uber (UBER), Lyft (LYFT) , Peloton (PTON) and Slack (WORK). Meanwhile, the debacle of WeWork’s aborted IPO is still fresh in the minds of chastened investors.
Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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