Casper opened for trading today at $14.50, but the company and its investors were hoping for bigger numbers. Here's why Casper's valuation was nearly half its initial $1.1 billion estimation.
Casper's CEO Philip Krim doesn't seem too concerned about the start-up watching its valuation take a major haircut.. "This is obviously a huge milestone for us. ... It doesn't distract us from building the business we want to build."
Casper is still losing money, giving analysts reason to question whether it will ever be profitable. In the nine months ended Sept. 30, Casper reported a net loss of $67.3 million on revenue of $312.3 million. While revenue increased 20% year over year, its losses widened about 5%. "Casper now is opening its own stores, and that raises expenses and capital needs," said Erik Gordon, a professor at University of Michigan's Ross School of Business. "It is selling through existing retailers, and that shrinks margins. ... A year from now, its shares are more likely to be half their opening price than twice the price."
The company launched in 2014 and was one of the pioneers of the mattress-in-a-box trend. It is now expanding its store fleet, and has 60 of them, with goals to have
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