Online clothing retailer Poshmark’s shares skyrocket by 142%, in one of the most scintillating trading market debuts.
The trading started at $97.50 on each share. The company has announced that it is the
Shares of Poshmark jumped to more than 140% as the company starts trading. The initial public offering (IPO) will be priced at $42.00 per share.
initial public offering (IPO) will be priced at $42.00 per share. This means that the initial valuation will be worth over $3 billion. According to the company resources, the shares would be sold around $35 to $39 as predicted initially.
Established in 2011, Poshmark is a marketplace for people to connect, buy, and sell used accessories, shoes, and clothes. The company follows a business model that is similar to Etsy and eBay. The company generates revenue by taking a commission out of each transaction that takes place on the website.
There has been a surge of online retailers selling used items because of rising demand from the consumers. Many companies have entered this market, and are seeking shares, such as StockX, TheRealReal which is a luxury consignment service, and ThredUp, an online thrift store.
Before Poshmark’s first trade, the CEO of the company appeared for an interview, where he mentioned the competitive advantage the organization has over its competitors, and how it differentiates it from other online resellers.
He explained the concept of ‘social e-commerce’, which facilitates the buyers and sellers on the website to interact and have conversations about the products.
In December last year, the company filed to go public and explained that they have seen a surge in business’ demand because of the pandemic. COVID-19 has provided an excellent opportunity and is a great source of profits for them since consumers all over the country have switched to shopping online during the lockdown.
He believes their sales will still grow because 45% of the products sold on the website include clothes, and after the pandemic, people will be eager to go out to events, social gatherings, and to work.
Poshmark’s revenue increased by 28% last year, amounting to $192.8 million. This was despite the company losing $33.9 million in 2019.