Caspers valuation could fall 40% in IPO as it reports 2019 results

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re taking stock of the latest from Casper, the D2C mattress company that is going public. The unicorn announced its initial IPO price range this morning, targeting a $17 to $19 per-share IPO price range — an interval that dramatically reprices the firm. When Casper first filed to go public, questions regarding its unprofitability, growth rate and economics quickly arose. Whether the firm would be able to go public at a flat price to its final private round was not obvious, and today’s news makes it clear that that is not likely.

Let’s explore the pricing and the company’s new valuation range, then figure out what the hell went wrong. To understand the new pricing, we’ll dig into the company’s preliminary full-year 2019 results. Let’s go!

Prices, ranges

Casper is hoping to sell 8.35 million shares at $17 to $19 apiece, with another 1.25 million shares reserved for its underwriting banks. Without the option, Casper could raise from $142 million to about $159 million. Including the underwriters’ shares boosts those results to $163 million to $182 million.