Mattress-by-mail merchant Casper cuts IPO price
Stock sales comes as business world sours on unprofitable startups
Mattress seller Casper Sleep Inc., the first well-known startup this year to file for an initial public offering, slashed the expected pricing of its IPO, putting demand for shares of highly-valued startups that still don't turn a profit into deeper question.
Casper on Wednesday cut its expected IPO price to a range of $12 to $13 a share, down from a prior estimate of $17 to $19 each.
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The New York-based company, which sells mattresses online and then delivers them through the mail, filed for an initial public offering last month. Casper reported $312.3 million in revenue in the first nine months of 2019, but a loss of $67.4 million. Revenue rose 20 percent from the comparable year-earlier period, while its losses grew by just under 5 percent. Founded in 2014, the company has been valued at $1.1 billion privately.
At the $12.50 midpoint of its new price range, Casper said it expects net proceeds from the offering of about $92.5 million, or roughly $107.1 million if the underwriters exercise an option to buy an additional 1.25 million shares.
ONLINE MATTRESS RETAILER CASPER TARGETS $182M IN IPO
The company is dipping its feet into the IPO market at a time when the business world has somewhat soured on startups that aren't profitable. The parent company of co-working space business WeWork pulled its IPO last year as the company faced concerns over its founder and former Chief Executive Adam Neumann, in addition to the company's growing losses.
Endeavor Group Holdings Inc., which owns the Ultimate Fighting Championship and the Miss Universe Pageant, also pulled its IPO last year partly because of how shares of exercise-bike company Peloton Inc. performed poorly on their first day of public trading in September.