Casper Sleep slashes the price of its IPO after recent disasters
Online mattress pioneer Casper Sleep Inc. is slashing the price of its initial public offering.
The New York-based company said in a filing with the Securities and Exchange Commission on Wednesday that it now anticipates offering approximately 8.4 million shares at $12 to $13 per share. Last month Casper said it expected to price the IPO between $17 and $19 per share.
Investors may be cautious after some recent IPO flops. The ride-hailing companies Uber and Lyft debuted on the market last year, but have continued to lose money and both have traded well below their IPO prices. Office-sharing company WeWork scuttled its IPO in September, a crisis that left it on the brink of bankruptcy and forced the ouster of co-founder Adam Neumann.
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For its part, Casper has expanded beyond online selling, opening 60 Casper stores and selling to 18 retail partners like Target and Amazon. It has plans to eventually expand to more than 200 stores in North America.
It has also expanded beyond mattresses to pillows, sheets and dog beds. It currently operates in seven countries.
WEST HOLLYWOOD, CA - JULY 09: A view of the Casper mattresses during Casper's LA celebration at Blind Dragon on July 9, 2015 in West Hollywood, California. (Photo by Rachel Murray/Getty Images for Casper Sleep Inc.)
Founded in 2014, Casper proved naysayers wrong that no one would buy a mattress online. In fact, it revolutionized the way mattresses were delivered by coming up with a mattress flexible enough to be folded into a box small enough to fit into a trunk of a car.
Casper has said that it has lots of room to grow, estimating that the global sleep economy was worth about $432 billion last year. It says the U.S. sleep business was nearly $80 billion last year. Casper's success has also helped to spur other online mattress rivals like Purple, Leesa Sleep and Tuft & Needle, which merged with the world's leading mattress manufacturer Serta Simmons Bedding.
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Still, Casper is losing money. For the first nine months ended Sept. 30, it had sales of $312.3 million. Net losses were $67.4 million during that period. In 2018, sales were $357.9 million, while losses were $92.1 million. In 2017, the company had sales of $250.9 million and incurred losses of $73.4 million.
Casper plans to use proceeds for working capital and to fund growth and for other general corporate purposes.
The stock will be listed under “CSPR” on the New York Stock Exchange.