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We’re going public, but expect no profits just yet, Casper

  • Casper Sleep, a privately held company that sells sleep-related products at several retail locations as well as online, has announced plans to go public this year.
  • But the company says it might not record any profit soon.
  • A section of its filed documents read: “We have a history of losses and expect to have operating losses and negative cash flow as we continue to expand our business”.

Casper Sleep, a privately held company that sells sleep-related products at several retail stores as well as online, has announced plans to go public this year. The company whose operations span the UK and US sort to clarify its financial position, saying it would bring in profits at a later time.

Casper last Friday filed its Initial Public Offering prospectus and would be the first in an industry it fondly describes as the multibillion-dollar “sleep economy”.

The company is not yet to make any profit and cautioned that the situation might continue for a while.

Casper’s S-1 filing states that it plans to list its shares at the New York Stock Exchange (NYSE) under the ticker “CSPR”. The mattress retailer has selected Jefferies, Goldman Sachs, and Morgan Stanley as its main underwriters.

Neither the firm nor its underwriter has disclosed the number of shares to be issued or the price per share.

Casper recorded a net loss of $92.1 million in 2018 and $67.4 million during the first three quarters of 2019.

The self-proclaimed “pioneer of the sleep economy,” has an estimated market value of $1.1 billion and is keen on dominating the multi-billion dollar “sleep economy”.

Since 2016 to last year in September, it spent more than over $420 million on marketing and advertising to boost its global brand. Its prospectus shows the entity channels nearly a third of its revenue towards marketing activities.

Tuft & Needle, a key competitor of Casper, reportedly spent about $15 million on marketing in 2018.

The company’s latest round of funding took place last year in March but failed to achieve its target, according to sources familiar with the financing.

Besides the funding, the company’s last year’s $556 million revenue target might have been too ambitious. Its filings indicate by the close of 2019’s third quarter, Casper had only recorded $312 million in revenue, leaving only three months to net more than $200 million to hit its half a billion dollars revenue target.

However, on the bright side, Casper recorded a 40% jump in revenue between 2017 and 2018, bringing in $350 million in sales up from $250 million.

“We have a history of losses and expect to have operating losses and negative cash flow as we continue to expand our business,” read a section of Casper’s S-1 document.

Some prominent investors in the company include American rappers Nas and 50 Cent; and actors Ashton Kutcher and Leonardo DiCaprio.

About the author

Damian Wood
Damian Wood
As an experienced trader, I work for myself managing my own small portfolio and also contributing on several investment news sites. I mix my passion for the industry and journalism to bring my readers informative and trustworthy articles.

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