Casper Sleep Shares Rise 13% in First Day of Trading - The Wall Street Journal

Casper Sleep CEO Philip Krim celebrated the company’s IPO on the New York Stock Exchange, where many startups have had a tepid welcome.

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Allison Prang

Allison Prang
The Wall Street Journal
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Updated Feb. 6, 2020 4:49 pm ET

Shares of Casper Sleep Inc. closed about 13% higher on their first day of trading Thursday, a day after the mattress-seller priced its IPO at the lower end of its expected price range.

Shares closed at $13.50 a share, higher than the company’s public offering price of $12 a share. The stock opened above its IPO price Thursday at $14.50 a share and reached an intraday high of $15.85 a share.

Those gains, however, were after the company cut its public offering price. Casper’s public offering price of $12 a share Wednesday was well below its initial range of $17-to-$19 a share, and at the low end of the $12-to-$13 a share range it set Wednesday morning.

The company has a valuation of about $535 million, based on its number of common shares outstanding before any options were exercised by the offering underwriters and also on Thursday’s closing price. Casper had been valued at $1.1 billion in a private funding round early last year.

Co-founder and Chief Executive Philip Krim declined to comment specifically on the company’s price cut in an interview with The Wall Street Journal Thursday. Mr. Krim said he has watched the turmoil in the IPO market, but it isn’t something the company is focused on.

“Today’s a really exciting milestone,” Mr. Krim said.

Casper, founded back in 2014, reported a larger loss for the first nine months of 2019 versus the comparable period a year prior, but revenue rose. The company’s loss grew almost 5% to $67.4 million, while revenue rose 20% to $312.3 million.

Mr. Krim on Thursday said Casper is focused on profitability and its operating leverage improved in 2019.

Casper, which sells foam mattresses online and delivers them through the mail, went public during a touchy time for IPOs. Investors have grown more tepid toward highly-valued startups that burn through money, and some companies in 2019 nixed their plans to go public, including the parent of WeWork, the coworking space company, and Endeavor Group Holdings Inc., the owner of the Miss Universe Pageant and the biggest talent agency in Hollywood.

Endeavor pulled its own IPO plans after shares of Peloton Interactive Inc., the exercise-bike company, struggled on their first day of trading on public markets. The stocks of ride-share companies Uber Technologies Inc. and Lyft Inc., which both went public last year, have also traded below the prices at which they went public.

Casper was selling 8.35 million common shares in its IPO. The company said it gave an option for underwriters to buy as many as 1.25 million shares for overallotments.

Related Video

Unicorns are getting haircuts, meaning high-flying startups are seeing their valuations shrink when they go public. WSJ explains why differences in the private and public markets are bloating what these companies might actually be worth.

Write to Allison Prang at allison.prang@wsj.com

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2020-02-06 21:49:00Z
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Uber lost less than expected last quarter as revenue growth accelerated, lost $8.5 billion last year - CNBC

Dara Khosrowshahi, CEO of Uber, appears on CNBC's Squawk Box at the 2020 World Economic Forum in Davos, Switzerland on Jan,. 22nd, 2020.

Adam Galici | CNBC

Uber stock rose in extended trading on Thursday after the company announced a fourth-quarter loss that was narrower than analysts had expected and moved its EBITDA profitability forecast forward.

The company's shares spiked when CEO Dara Khosrowshahi said on the company's earnings call that the company was moving its EBITDA profitability target to Q4 2020, ahead of its original promise of profitability in 2021. They're now up more than 8% after hours.

Here's how the company did:

• Loss per share: Excluding certain items, 64 cents, vs. 68 cents as expected by analysts, according to Refinitiv.
• Revenue: $4.07 billion, vs. $4.06 billion as expected by analysts, according to Refinitiv.

Uber's revenue growth accelerated on an annualized basis to 37% from 30% one quarter ago, the company said in a statement. Net loss attributable to Uber for all of 2019 totaled $8.51 billion, primarily because of stock-based compensation.

Uber's top segment, Rides, including ride-sharing services and fees from drivers, delivered $13.51 billion in gross bookings, up 18% and below the $13.60 billion estimate among analysts polled by FactSet.

Uber attributed growth in Rides to ongoing global expansion, access to pick up and drop off passengers at airports the world over, and higher-priced premium offerings for passengers like Uber Comfort, which uses vehicles with more head- and legroom.

Gross bookings from the Eats segment, including payments from restaurant and delivery partners, came in at $4.37 billion, up 71% and above analysts' $4.13 billion estimate.

Uber is still paying out a massive amount of what it calls "driver referrals and excess driver incentives" to drivers in its food and ridesharing business.

Eats referrals and incentives for drivers cost Uber $1.13 billion in 2019, and $319 million in Q4 alone, according to the filing. Rides driver referrals and excess driver incentives cost Uber $123 million in 2019, with $20 million of that in Q4, the filing said.

Given those payouts to drivers, Eats adjusted net revenue clocked in at $1.38 billion for the year, up from $759 million in 2018. Rides adjusted net revenue hit $10.62 billion for 2019, versus $3.04 billion in 2018.

Adjusted EBITDA for all segments except Rides were all in the red year over year. Rides produced $742 million in EBITDA, up some 281%.

In the quarter Uber had 111 million monthly active platform consumers, the number of unique consumers who completed a ride or received a meal through Uber at least once in a given month, averaged across the quarter. That figure is up from 103 million in the previous quarter and in line with the FactSet consensus estimate.

The company logged 1.9 million trips, including rides and Eats meal deliveries, in the fourth quarter, up from 1.8 million in the previous quarter, in line with FactSet consensus.

In its Q4 release, it also reminded shareholders that it is now the most downloaded app globally in two categories, ridesharing and food delivery on both the Apple App Store, and Google Play Store, according to SensorTower.

With respect to guidance, analysts polled by FactSet are expecting 2020 earnings before interest, taxes, depreciation and amortization (EBITDA) of $2.84 billion. Guidance is expected to come on the company's earnings call.

Executives will discuss the results and issue guidance on a conference call at 4:30 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Uber is driving toward profits: JPMorgan

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2020-02-06 20:32:00Z
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Dow Jones On Track For 4% Weekly Gain After China-Fueled Rally - Investor's Business Daily

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1. Dow Jones On Track For 4% Weekly Gain After China-Fueled Rally  Investor's Business Daily
2. Stocks extend week's gains after strong employment report  msnNOW
3. Dow joins S&P 500, Nasdaq at records as China says it will slash tariffs on $75 billion in U.S. goods  MarketWatch
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5. Stock market live updates: Dow hits record, Twitter soars, Tesla recovers  CNBC
6. View full coverage on Google News

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2020-02-06 20:25:00Z
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SpaceX may spin out internet-from-space business and make it public - The Verge

SpaceX may spin off its massive internet-from-space initiative called Starlink into a separate business and take the company public, according to Gwynne Shotwell, the company’s president. Shotwell made the comments today at an event for private investors in Miami, Florida, Bloomberg reports.

“That particular piece is an element of the business that we are likely to spin out and go public,” Shotwell said, according to Bloomberg. “Right now, we are a private company, but Starlink is the right kind of business that we can go ahead and take public.”

Starlink is an ambitious proposal: a constellation of nearly 12,000 satellites designed to beam down broadband internet coverage to every part of the globe. So far, SpaceX has launched 240 satellites for Starlink, making the company the operator of the largest active satellite constellation in the world. The company has plans to launch up to 24 missions this year, sending up 60 satellites per flight. Shotwell claimed last year that the company would start rolling out partial coverage with the constellation in 2020.

Pursuing an initial public offering for Starlink would be a big step for the Elon Musk-run SpaceX, which has remained private since it was founded in 2002. Musk, who notoriously hates publicly traded companies, has in the past said he wouldn’t take SpaceX public until the company’s Mars vehicle was complete. “Some at SpaceX who have not been through a public company experience may think that being public is desirable,” Musk wrote in an email to SpaceX employees in 2013. “This is not so. Public company stocks, particularly if big step changes in technology are involved, go through extreme volatility, both for reasons of internal execution and for reasons that have nothing to do with anything except the economy.”

The most recent valuation of SpaceX put the company at around $33.3 billion, according to CNBC. Most of SpaceX’s business has revolved around sending satellites or cargo into orbit, with NASA, the Department of Defense, or private satellite operators as customers. But with Starlink, SpaceX plans to sell a service directly to the general public. Customers will be able to purchase user terminals to patch into the Starlink constellation, turning SpaceX into a consumer-facing business.

Starlink has previously been advertised as an important part of SpaceX’s future. Musk has claimed that the revenue from the project will help fund sending people to the Moon and Mars. Right now, SpaceX is working on a next-generation rocket called Starship to jump-start the company’s interplanetary ambitions. Musk has said that the development of Starship could cost between $2 billion and $10 billion.

SpaceX isn’t the only company pursuing the internet-from-space business. Other private companies such as OneWeb, Kepler Communications, and even Amazon have proposed building massive constellations to beam internet coverage to the Earth below. So far, only SpaceX and OneWeb have begun launching satellites.

Starlink has also been a source of controversy for those in the astronomy community who are concerned that the massive constellation could muck up their observations of the night sky. The Starlink satellites are particularly bright and have already ruined exposure images taken by telescopes on the ground. SpaceX tried to mitigate this problem by coating one of its satellites to make it appear darker in the sky. It’s unclear if the coating has worked yet, and SpaceX plans to continue launching its bright satellites in the meantime.

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2020-02-06 19:06:16Z
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Casper CEO deflects on IPO's massive valuation haircut, calling valuations just 'moments in time' - CNBC

Casper's CEO doesn't seem too concerned about the online mattress maker seeing its valuation take a major haircut during its public market debut.

"Valuations are just moments in time," CEO Philip Krim told CNBC's "Squawk Alley." "This is obviously a huge milestone for us. ... It doesn't distract us from building the business we want to build."

Casper shares surged nearly 30% following the company's initial public offering Thursday morning, opening at $14.50.

Casper had priced its IPO at $12 per share, or the very low end of its target range, Wednesday evening. That was after it slashed its target price range, from $17 to $19 a share, to $12 to $13 per share.

The retailer has a valuation of about $575 million based on where shares opened Thursday. But at one point, as a private business, Casper was valued at $1.1 billion, giving it so-called unicorn status.

Like many Silicon Valley-backed start-ups looking to go public, however, the company has faced scrutiny for being unprofitable and for its high costs to acquire new customers and keep them. It also faces dozens of competitors in the industry, ranging from Amazon to Walmart to mattress maker Purple.

"To reach profitability, Casper must 'beat themselves' as well as they've beat others in the market — challengers and incumbents alike," said Web Smith, founder of 2PM. "They'll have to build their company like the early-stage retailers of old, long before the abundance of venture capital and rising [customer acquisition costs]."

Krim appeared upbeat at the New York Stock Exchange, where Casper shares started trading under the ticker symbol "CSPR."

"I feel awesome," he said. "It's been a great day. It's an awesome milestone for Casper. So I'm pumped."

Casper was named to CNBC's Disruptor 50 list in 2019.

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2020-02-06 16:50:00Z
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Casper Sleep stock jumps 20% in trading debut after IPO priced at low end of range - MarketWatch

Casper Sleep Inc. shares CSPR, +27.50% rose 20% in their trading debut Thursday, after underwriters priced the company's initial public offering at the low end of the range. The stock was last up about $3, or 25%. The New York-based company reduced its price range on Wednesday, just hours ahead of pricing, in a move that seemed to signal pushback from investors, who have been leery of loss-making companies that were highly valued in private markets. Casper sold 8.4 million shares to raise $101 million, at a valuation of just $468 million, well below the $741 million implied by its previous price range and the $1.1 billion garnered in its last private funding round.

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2020-02-06 16:06:00Z
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FAA's Dickson says regulators seem set to agree on 737 MAX design fix - Yahoo News

Steve Dickson, Administrator of the FAA, speaks at the UK Aviation Club in London

By Alistair Smout

LONDON (Reuters) - U.S. Federal Aviation Administrator Steve Dickson said on Thursday international air safety regulators were likely to agree on the design fixes needed to return the Boeing <BA.N> 737 MAX aircraft to service.

Dickson, the U.S. regulator who has responsibility for approving a return to service by the grounded 737 MAX, said he wouldn't put a timeframe on its return but that it would become easier to predict after its certification flight, which he said could come in the next few weeks.

The 737 MAX was grounded in March 2019 after two fatal crashes that killed 346 people.

He said that international regulators including EASA might differ in terms of the operational return to service of the plane, but agreed on what needed to be fixed.

"On the design approval, from everything that I have seen I think we'll have very solid alignment," he told an airline industry event in London.

Boeing has said its best estimate is that the aircraft will not be back in the air until mid-2020, after endorsing simulator training for pilots before flights resume, and that regulators will determine the timing.

Last month, Dickson told senior U.S. airline officials that the FAA could approve the return of the aircraft before mid-year, earlier than the planemaker has suggested, according to people briefed on the call.

But in a visit to London he cautioned against putting a definitive timeline on the return of the MAX.

WIRING

"There is no timeframe, I don't think it's helpful to get out there with timeframes or timelines," he told reporters at a briefing.

"For Boeing's part, what I have been encouraging is to not make public announcements."

The FAA and Boeing said in January they were reviewing a wiring issue that could potentially cause a short circuit on the grounded 737 MAX.

Officials said the review was looking at whether two bundles of wiring are too close together, which could lead to a short circuit and potentially result in a crash if pilots did not respond appropriately.

"They have not given us a proposal on the wiring yet," Dickson said.

"I wouldn't say I'm worried. I want them to take whatever time they need to give us a fulsome and a data-driven proposal."

He also said that the software audit had been completed, but there were "possible adjustments" to an annunciator light - a warning signal - and power to the displays.

"I don't think that will be a significant delay," he said.

(Reporting by Alistair Smout, Writing by Paul Sandle and Alistair Smout; editing by Stephen Addison, William Maclean)

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2020-02-06 15:34:00Z
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