Casper’s IPO Wake up Call ๐Ÿ›

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Casper’s IPO Wake up Call

Meet Casper, not a mattress retailer, but โ€œthe Nike of sleep.โ€ Itโ€™s for millennials, by millennials, and apparently, a growth stock to-be after it goes public today. However, not everyone is convinced. Some investors think itโ€™s a Silicon Valley imposter!

Casper is the first big-time initial public offering (IPO) of 2020, but itโ€™s not the first big-time unicorn to turn โ€œstory-stock.โ€ Like Uber, Lyft, and Peloton before it, Casper’s IPO prospectus boasts the heady combination of blue-sky growth potential, a revolutionary approach to an existing market, and a billion-dollar private valuation.

All these factors make for a compelling story and could set the firm up to raise more money and buy out smaller start-ups. However, with no profits to show investors, Casper isnโ€™t worth much without that story.

Uber and Lyft crumbled last year after Wall Street caught on to their alice-in-wonderland stories, no longer confident the ride-hailing apps could answer a business’s existential question of profitability. Shares in both companies closed the year down double-digits from their IPO levels.

Clearly, the mood has changed somewhat among investors. Even venture capitalists who poured the early billions into these firms are now hinting, โ€œchop chop, time to make some money!โ€

Casperโ€™s initial public offering today has been repriced at between $12 and $13 from $19. Thatโ€™s a third of the companyโ€™s valuation conceded by underwriting banks as skepticism grows around its break-even potential. With a grand vision of dominating the emerging โ€œglobal sleep economy,โ€ the market is being thrown bait here by Casper. Fool me once…

The Invstr community ought to keep a close eye on how the market reacts to Casperโ€™s IPO call signs today, especially given that many other tech IPOs this year will share similar traits. Will it fly out of the traps with buy orders a plenty, or suffer a drowsy crash?

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