Casper IPO: $CSPR
The surge of the IPO's is back!
And this time with a lot of companies that you have definitely seen in the media or elsewhere. I am almost positive you have heard of this next one, especially if you are a Youtube or Facebook frequenter because their ads are everywhere! Let's take a look at Casper Sleep, creator of the Casper Mattress.
Casper Sleep is an e-commerce company that sells "Sleep Products" primarily online and also in-person at select locations. It is super new and young, actually younger than I thought, at just 5 years old (founded April 22, 2014). Founded by Philip Krim, Krim seems to be a passionate mattress industry lover as he is previously from ,"angelbeds.com", "tranquilitymattress.com" and "SleepBetterStore.com". Just a little reminder to find your niche and become really really good at it. ;) Casper Sleep is currently based in New York, New York and has over 300 employees.
Most obviously Casper sells mattresses, right? We have all seen the commercials on major websites like Facebook, Instagram, Youtube, etc. But since the beginning Casper has expanded it's offerings to sleep related products in general. Everything from mattresses (of which they have 3 kinds), pillows, bed frames, assorted bedding, and even a new glow light that assists in falling asleep.
If you are like me though you are saying, "But Ashley, yes I have seen Casper everywhere, but I have also seen a ton of other mattress website companies all over the place." And yes, that is exactly my point. So let's take a look at what makes Casper different and also who some of their competitors are.
Part of what Casper claims to be is a direct to customer mattress company which is a good thing to be. Because about a decade ago, to get a mattress, you had to go to a showroom partly because mattresses are so large and hard to ship. So when companies started to come up with mattresses that could be rolled up, vacuum sealed, and shipped straight to your door, the mattress market was a little bit shook. But Casper isn't the only one. Tons of companies have started to adopt this model, and Casper certainly wasn't the first, it was just one of the first to market it super well.
How many other companies can you think of off the top of your head that do the same thing? Purple, Helix, Lull, Avocado Green, Nectar, Tuft and Needle, Leesa, Zinus. I can go on and on. So what makes them different? I would bargain to say, not much. Most of these bed companies are comprised up of some combinations of different foam types with differing thicknesses and MAYBE a special type of top that is possibly slightly different from the rest. Some still contain springs, some not. It's easy to say that beds are very much a matter of preference and that I have never met a bed that literally everybody loved despite what most mattress companies claim. In fact as I write this, in the trading room we just talked about CSPR in the room, several Casper owners attending actually said they didn't like their mattress at all.
Right now, on the street, other mattress companies you will see are Tempur Sealy International (TPX), Sleep Number Corp (SNBR), and even Purple Innovation Inc (PRPL) who IPO'd in late 2018. TPX and SNBR seem to have been moving sideways for the last 10 years with a slight move higher as the market has been moving higher. Not too surprising as you could probably put money into almost any stock and make money at this point. Then we move on to PRPL who I would consider one of Caspers biggest competitors. I expect Casper to trade somewhat similarly to them. I am seeing a lot of selling followed by a long sideways move.
According to Forbes, "The direct-to-consumer mattress company (Casper), which sells its products in seven countries, recorded net losses of $73.4 million in 2017, $92.1 million in 2018 and $67.4 million in the first nine months of 2019. Revenue increased over 40% between 2017 and 2018, rising from just over $250 million to more than $350 million—though the company warned it won’t be profitable anytime soon." Revenue increase is a good thing, but the amount of marketing they still do will have them losing money for the foreseeable future.
To me, your money is better spent elsewhere unless this is a really long term investing play on your end. With the flooding of the mattress market, I just see this stock being bought out one day by one of the bigger mattress companies. It's a little too early for me to chart out what I think it might do but we will revisit this in about a month to take a peek at what she is doing!
There you have it! Our thoughts on Casper all wrapped up with a shiny red bow. What do you think? I always love spending the next few months watching companies after they IPO to see what investors think of them and just generally how they preform. Speaking of which: which IPO was your favorite of last year, 2019? I would have to say mine was unequivocally, Pinterest. Excited to see what she becomes! Until next time, Stay Awesome!
“A little magic can take you a long way.” ― Roald Dahl