Casper Stock Price Jumps After Pricing IPO At Lower Range

By Amit Chowdhry ● February 6, 2020
  • E-commerce mattress company Casper Sleep went public today. After pricing the IPO at the lower range, the company’s stock price increased from the opening price of $12 to a close of $13.31.

Today e-commerce mattress company Casper went public on the New York Stock Exchange under the symbol “CSPR.” And the stock price had jumped nearly 30% at the market open to $14.50. Casper had priced its shares at $12 on Wednesday night.

Initially, Casper was planning to price its shares somewhere between $17 and $19. As of 11:25 AM ET, the stock price was at above $15 per share but then dropped back down again to $13.31 at the close of the market today.

The road to an IPO was not very smooth for Casper. At the debut price of $12 per share, the company’s valuation was around $475.5 million.

Casper was privately valued at $1.1 billion following a $100 million Series D round in March 2019. So the company’s market value is less than half of where the company was valued privately.

Casper is not profitable yet. In the first 9 months of 2019, the company reported $312.3 million in revenue and $67.4 million in losses. Revenue had increased by 20% year-over-year, but the losses widened around 5%.

Due to the losses and high customer acquisition costs, investors were less willing to support the unicorn valuation. If the company had gone public at somewhere between $17 and $19, then the market value would be above $780 million.

In an interview with CNBC, Casper CEO Philip Krim did not express concern about the drop in the company’s market value.

“Valuations are just moments in time,” said Krim. “This is obviously a huge milestone for us. … It doesn’t distract us from building the business we want to build.”

Before going public, Casper raised $339.7 million in venture capital funding. Some of the company’s investors include retail giant Target, NEA, IVP, Lerer Hippeau, and actor Leonardo DiCaprio. There are rumors that Target was interested in buying Casper for $900 million in 2017 but then decided to invest $80 million instead.

With the proceeds of the IPO for working capital, Casper plans to fund growth and other general corporate purposes.

Casper launched in 2014 and the company plans to aggressively expand its stores. Currently, Casper has 60 stores and it is planning to have 200 opened soon. And Casper sells mattresses and pillows through retail partners like Amazon and Costco.

The company’s rivals include Purple, Nectar, and Tuft & Needle. And retail giants Amazon and Walmart also have their own mattress brands.