Casper is in the business of marketing, advertising, and selling mattresses, duvets, sheets, and the like, and this is a low-margin business with no barriers to entry, open to the entire world, requiring huge marketing expenses to achieve any kind of growth.
Yet despite this it attracted a unicorn valuation of $1.1BIL in March 2019
Closing price after its first days of trading Casper’s market valuation of $312 million has collapsed by 72% from that unicorn “valuation” of $1.1 billion.
Rather than launching an IPO at its unicorn value of over $20/ share Casper valued its IPO at $12… it’s now at $10
In its Prospectus, the company disclosed that revenues grew only 20% year-over-year to $312 million in the nine-month period through September 2019, but that this $53 million increase in revenues had been obtained by spending $114 million in “sales and marketing” expenses. This is the kind of business Casper is in – not some high-tech app-based disrupt-the-world foam-mattress revolution this is a low-margin business with no barriers to entry, open to the entire world, requiring huge marketing expenses to achieve any kind of growth.