Update (1130ET): Who could have seen that coming? Newly IPO'd Casper, which opened at $14.50, traded up to $15.85, has crashed back below its $12 IPO price (which was already at the low-end of lowered guidance)...
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Update (1600ET): By late afternoon, Casper dropped 6.5% below the 14.50 per share price it debuted on the New York Stock Exchange on Thursday morning.
Still, the new issue trades about 13.50% higher than where it was priced at $12 per share on Wednesday evening. Though -50% collapse in valuation from its latest funding round.
The conclusion from the first day of trading on the public markets, well, everyone is tired of buying crap unicorn stocks that don’t make money during a period where the IPO and VC bubbles have already been deflating since WeWork imploded.
Good luck Casper, you’re going to need it, Cramer can only pump for so long…
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Update (Feb. 06): Casper opens at $14.50 per share on the New York Stock Exchange on Thursday morning after it priced the IPO at $12 per share on Wednesday evening.
About 20 minutes after Casper debuted on the secondary markets, price has slumped back to the 14.50 level. Perhaps, a lack of momentum in buyers as many have given up buying IPO unicorns because of the fear the new issue will implode (just look at what happened to Uber and Lyft.)
Here's the Casper team ringing the bell at the NYSE - hyping up traders to buy their unicorn stock.
Seems like Cramer has initiated a new pump: Casper.
They priced it right to allow buyers to make money . Casper pic.twitter.com/TwmDDgyND8— Jim Cramer (@jimcramer) February 6, 2020
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Update (Feb. 05 1740ET): Casper is another disastrous IPO being dumped onto the public markets by VC firms and investment banks. The mattress-in-a-box unicorn has seen its valuation collapse by over half in the last year.
On Wednesday evening, Casper priced 8.35 million shares at the low end of the range, or at $12 per share, far below the $17 to $19 per share range it sought last week.
Casper will begin trading on the New York Stock Exchange on Thursday morning.
And the big question, how is Twitter reacting to Casper's IPO tomorrow?
And Casper lowers IPO pricing. Get ready to short. Nowhere near the fanboy army Tesla has.— Richard (@king_of_thougts) February 5, 2020
*CASPER PRICES IPO AT $12, DOW JONES SAYS— CÆTUS (@caetuscap) February 5, 2020
... who buys this sh*t?
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Update (Feb. 05): Casper Sleep Inc. reminds us of the WeWork implosion late last summer when the shared workspace company failed to IPO, ran out of cash, and was then bailout out.
The unicorn mattress retailer slashed its IPO price in the latest filing, now between $12 and $13 per share, a far cry from $17 to $19 last week. The move in price reduced the company’s valuation to $500 million, down from $768 million last week, and down from $1.1 billion in the latest private funding round. This means the company has lost more than half of its value in about one year.
Morgan Stanley, Goldman Sachs, and Jefferies are some of the underwriters on the deal.
This appears to be yet another move by VC firms and investment banks to dump trash onto the public markets to save their high net worth clients of financial elites, politicians, Hollywood actors, and sports icons, which some in the latest round, could take a massive haircut on their investment.
And what does Twitter have to say about Casper's IPO attempt?
Casper valuation on private markets early 2019: $1.1 B— Eliot Brown (@eliotwb) February 5, 2020
Casper hoped-for IPO valuation last month: ~$750 M
Casper hoped-for valuation now: ~$500 M
$CSPR Feb 5 (Reuters) - Casper Sleep Inc is seeking a much lower valuation in its initial public offering than it had initially expected as the money losing online mattress retailer tries to lure investors in a tepid market for IPOs following WeWork's debacle last year.— c lark (@7LadyQ) February 5, 2020
My simplistic initial takeaway from skimming Casper IPO: Being significantly unprofitable with only 20 percent revenue growth is not a great place to be in this environment— Jason Del Rey (@DelRey) January 10, 2020
Another WeWork?— Stalingrad & Poorski (@Stalingrad_Poor) January 27, 2020
Casper IPO valuation dwindles from peak of $1 billionhttps://t.co/EfusRX6Eo6
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"Smart money" investors, such as some Hollywood actors and sports icons, are linked up with top VC firms and investment banks, have been stung by the VC bubble of overinflated unicorns that see a valuation collapse right before IPO.
Think WeWork, and what happened to the office-sharing space company last fall, it's valuation plunged as it attempted to IPO. The company then ran out of money and was bailed out by its largest shareholder, SoftBank.
Leonardo DiCaprio and rapper 50 Cent have been the latest "smart money" investors to feel the pain of plunging valuations, after their investments in Casper Sleep Inc., an online mattress retailer, saw valuations fall as it attempts to IPO.
Reuters notes that the unicorn mattress company will issue 9.6 million shares between the $17 to $19 level, which is at the top part of the range, giving the company $182.4 million in IPO proceeds. Such a level would also give the company a $768 million valuation, or about a -23% drop in book value from its latest funding round.
In 1Q19, the money-losing company was valued at $1.1 billion, which is a -30% decline in today's valuation versus what was seen early last year.
We noted since WeWork imploded last fall, investors' risk appetite for money-losing companies has collapsed. This has also marked the top of not just the VC bubble, but also the IPO bubble.
"Valuations in the private market are currently under the microscope, especially with unicorns, as they attempt to tap the public markets," said Jeff Zell, a senior research analyst at IPO Boutique.
"The biggest hurdle that Casper Sleep is going to have during the roadshow process is proving to investors a viable path to profitability while competing in a highly competitive industry," Zell said.
Even "smart money" in Hollywood is feeling the pressure as the bubble of everything deflates.