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Highlights
- Casper Sleep Inc (NYSE: CSPR, CSPR:US) stock skyrocketed by over 88 per cent on Monday, November 15.
- CSPR stock spiked after the firm said that it is set to be bought by Durational Capital Management.
- This comes nearly two years after the New York-based firm went public via an IPO.
Stocks of Casper Sleep Inc (NYSE: CSPR, CSPR:US), a bedding and mattress manufacturer, skyrocketed by over 88 per cent on Monday, November 15, following the announcement that it is going private.
This comes nearly two years after the New York-based firm went public in a lukewarm offering.
Let’s see how Casper Sleep and Durational Capital have planned the acquisition.
Casper Sleep-Durational Capital – Acquisition details
Casper Sleep said on Monday that it is set to be acquired by private equity firm Durational Capital Management for US$ 6.9 a share, which is a 94 per cent premium of its closing price of US$ 3.55 on Friday.
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The acquisition deal is said to have been unanimously greenlit Casper Sleep’s board, although it still remains subject to customary closing terms and the approval of Casper’s shareholders.
The transaction is expected to be completed in the first quarter of 2022, and following that, Casper Sleep will go back to functioning as a privately-held enterprise based in New York.
Casper Sleep IPO
Founded in April 2014, Casper Sleep garnered massive attention from customers for its products, especially its mattresses that could be squeezed into a mini fridge-sized box.
As the startup grew, it went on to attract celebrity investors, including Hollywood actor Ashton Kutcher and American rapper Nas.
Why is Casper Sleep (CSPR) going private nearly 2 years after IPO
However, as time passed, interest around the mattress maker seemingly dipped.
In February 2020, Casper Sleep Inc saw its initial public offering (IPO) rake in a capital of about US$ 100.2 million after it sold some 8.35 million shares for US$ 12 apiece.
Initially, the bedding and mattress retailer had planned to sell its shares for US$ 17 to US$ 19 per piece at its IPO, but its later snipped its price band down to US$ 12-13 apiece.
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After finally holding its IPO at the lower end of the already reduced price band, Casper Sleep’s valuation reportedly came down to about C$ 470 million from that of US$ 1.1 billion in March 2019.
Bottom line
One of the factors that could be pushing Casper Sleep back into the world of private companies is a drop in demand.
Apart from an unsteady demand for beddings and mattresses amid the COVID-19 pandemic, the over-crowding of the industry could have been a contributing factor to Casper Sleep’s exit from the public markets as well.
In its latest quarterly result, Casper Sleep reported a 26.8 per cent year-over-year (YoY) surge in its revenue of US$ 156.5 million. However, its net loss had also surged by 59.4 per cent YoY to US$ 25.3 million in Q3 2021.
