Poshmark - First trade day gains at 141%
Shares of online clothing reseller Poshmark ended the day up more than 141% in the company's market launching Thursday. The stock began trading at $97.50 per share. On Wednesday, Poshmark priced its IPO at $42 a share, giving it an initial assessment of more than $3 billion. The company formerly stated it expected to sell shares at between $35 and $39. It was valued at nearly $600 million in its last round, a series D in November 2017. Poshmark, founded in 2011, is a web marketplace for pre-owned clothes, shoes and devices. Like eBay and Etsy, Poshmark links purchasers with sellers, who frequently note products from their own closet. Poshmark earns money by taking a cut of every transaction. Online marketplaces for secondhand goods have grown in appeal amongst consumers recently, with a number of players aiming to acquire share, consisting of high-end consignment site TheRealReal, sneaker reseller StockX and virtual thrift shop ThredUp, which filed confidentially to go public last year. In an interview ahead of the business's first trade, Poshmark CEO Manish Chandra stated the company is trying to distinguish itself from others in the online resale space by focusing on "social commerce," wherein buyers and sellers can chat casually about products on the site. The business is going public at a time when the 2021 IPO market is warming up. Payments company Affirm skyrocketed nearly 100% in its market launching on Wednesday. Pet supply seller Petco Health and Health and online gaming business Playtika are also slated to go public on Thursday. Poshmark submitted to go public in December. In its IPO prospectus, Poshmark said it has gained from a flood of demand generated by the coronavirus, as stuck-at-home shoppers continue to rely on online sellers for essential and excessive items. The marketplace has actually acted as a source of extra income for Poshmark's 4.5 million sellers, the business stated. Chandra told he does not see the post-pandemic future, which will likely bring a return to shopping at brick-and-mortar shops, as a hazard to Poshmark's organization. " We see individuals in fact going to events, going to offices, in fact participating in the world as an accelerant, because 45% of the items we sell are garments," Chandra said. "That's actually something that's not seen that level of excitement as it will be when we actually engage in the physical world." Poshmark generated $192.8 million in income in the first 3 quarters of 2020, an increase of 28% from the very same duration last year, according to its S-1. The business also revealed it made a profit of $20.9 million over that stretch, after losing $33.9 million a year ago. The company now counts 6.2 million active purchasers and 31.7 million active users, the majority of whom are female and either millennials or Gen Z. It notes Amazon, eBay, Etsy, Facebook, Shopify, TJ Maxx and Walmart among its rivals. Morgan Stanley and Goldman Sachs are leading the offering.