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Casper Ends Public Debut Worth Less Than Half Private Valuation

Liana Baker
Casper Ends Public Debut Worth Less Than Half Private Valuation

(Bloomberg) -- Bed-in-a-box seller Casper Sleep Inc. rose in its trading debut, but still ended the day worth less than half the valuation it reached as a private company.

Shares of Casper closed up 13% Thursday at $13.50 apiece in New York, giving the company a market value of $535 million. The online mattress retailer was last valued at $1.1 billion in a private funding round last year.

Casper sold 8.35 million shares Wednesday for $12 each. This came after it cut its price target significantly from an initial range of $17 to $19.

“We’re seeing consumers come back very frequently to buy from Casper,” Chief Executive Officer Phillip Krim said in a Bloomberg TV interview. “That will continue to accelerate as we bring more products to market.”

The IPO shows investors have grown skeptical of money-losing unicorns -- startups whose private valuations reached $1 billion or more. The listing follows landmark but largely disappointing performances last year by consumer-oriented companies including Uber Technologies Inc. and its smaller rival Lyft Inc., as well as SmileDirectClub Inc. and Peloton Interactive Inc.

Casper priced its IPO on the same day as PPD Inc., a biotechnology and drug-research services firm that raised $1.62 billion, pricing its shares at the top of its target for the offering. PPD closed up 12% on Thursday. In the past year, such business-to-business firms, especially software makers, have tended to fare better in their IPOs than consumer-focused companies.

New York-based Casper, founded in 2014, became one of the leading brands in its niche thanks to its pioneering status and savvy marketing. Since then, a slew of competitors have emerged in the U.S. and abroad. From 2016 to September 2019, Casper spent $422.8 million on marketing, according to an earlier filing.

Casper had 60 stores in the U.S. and Canada as of Sept. 30. Its sales increased to $312 million for the nine months ended Sept. 30, a 20% gain from the same period in 2018. Its net loss widened to $67 million from $64 million during the same period in 2018.

The company’s backers include Target Corp. and Dani Reiss, the chief executive officer of Canada Goose Holdings Inc.

The offering was led by Morgan Stanley, Goldman Sachs Group Inc. and Jefferies Financial Group Inc. The company’s shares are trading on the New York Stock Exchange under the symbol CSPR.

(Updates valuation from first paragraph.)

--With assistance from Matt Townsend.

To contact the reporter on this story: Liana Baker in New York at lbaker75@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha

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