Casper mattress IPO not so sleepy after all
Shares of online mattress pioneer Casper popped in their trading debut Thursday on the New York Stock Exchange. That defied early indications that the initial public offering, which had priced at the low point of its proposed range, would be a snoozer.
Instead the stock shot up after it started trading for the first time on Thursday morning. As of mid-day, Casper's stock price had risen to just above $15.25, or nearly 25% above its initial offering price.
The strong opening offers encouraging news after recent IPO flops, and miscues like WeWork, which had to pull its IPO due to its weak finances and concerns about mismanagement.
Nonetheless, the Wall Street open wasn't all sweet dreams for Casper.
Earlier this week, Casper opted to lower its IPO price to $12. A month ago, the company said it was hoping to price its IPO at $19 a share and raise $150 million. The cut to $12 means that the company only raised $100 million this week.
It was also likely the reason the offering got such a positive reaction from investors. The lower price gave the direct-to-consumer mattress company a valuation of about $450 million, one of the lowest of similarly buzzy recent IPOs. Peloton's September IPO valued the streaming workout-equipment maker at $8 billion, for instance. Its shares fell on their debut, but have since rebounded and are now trading above its IPO price.
Casper could have used the extra cash. The mattress company disclosed its financial statements for the first time ahead of its IPO. The filings showed that Casper had $312 million in sales in the first nine months of last year, but lost $67 million on that revenue. The company in its offering statement said it has a history of losses, and that it expects expenses to rise over the next few years.