Casper’s return to private life isn’t a canary for DTC companies going public

Former venture-backed startup Casper is going private in an all-cash transaction, it announced this morning. Since its early-2020 IPO, Casper has struggled as a public concern, seeing the majority of its value evaporate after its operating results failed to excite investors.

Casper will sell for $6.90 per share, or around a 94% “premium to the closing share price on November 12, 2021,” per its own mathematics. When it listed, Casper sold its stock for $10 per share, rising above $15 per share in its early life before falling as low as $3.18 per share more recently

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Why do we care about one public company’s planned exit from the public markets? Because Casper’s demise as an independent, growth-oriented DTC company details what can go wrong for such firms. And given that we’re seeing cash-hungry operations like Sweetgreen and Rent the Runway list, it’s worth digging into what happened at Casper.

This is not to say that every direct-to-consumer (DTC) company is the same. Or even that Casper is entirely DTC; it isn’t. But we can learn from Casper all the same because it provides a living example of how a company can struggle post-IPO.

When we examine its results, it’s clear that cash was the issue and that the company’s share price likely prevented it from saving itself, while also providing an avenue for external rescue.

What the Casper saga means for DTC companies more broadly is nuanced, but we’ll take that on at the end. To the numbers!

Why Casper had to sell

Casper’s exit might feel like an inevitability in retrospect, but it’s worth remembering that the company enjoyed a brief return to pricing form earlier this year: