Poshmark soars in debut after IPO fetches $277 million
Poshmark Inc., the online marketplace for secondhand goods, more than doubled in market value in its trading debut after raising $277 million in its U.S. initial public offering, pricing the shares above a marketed range.
Shares opened at $97.50 and traded as high as $104.98 in New York on Thursday — 150% above the IPO price. The company sold 6.6 million shares for $42 each Wednesday, after marketing them for $35 to $39.
The shares traded up 142% to $101.50 on Thursday, valuing the Redwood City, Calif.-based company at about $8.3 billion on a fully diluted basis, including options and restricted stock units.
The Poshmark IPO follows that of Affirm Holdings Inc., the online consumer lender that almost doubled on its trading debut Wednesday after raising $1.2 billion in its IPO. Affirm shares continued to climb Thursday.
Poshmark, which bills itself as a social marketplace, differentiates itself from competitors by emphasizing interactions among buyers and sellers. Some 74% of the items sold are secondhand, with active users spending 27 minutes on the site each day, Chief Executive Manish Chandra said in an interview.
“I think when people look at us they think about how this can be shopping in a very different way and I think that’s why people are excited about our social marketplace,†Chandra said.
Online resellers are having a bit of a moment with online thrift shop ThredUp Inc. planning an IPO. RealReal Inc. went public in 2019.
Consumers, particularly from Generation Z, are increasingly buying used items, partly because it’s more sustainable, said Navin Chaddha, a Poshmark board member and managing director at founding investor Mayfield.
Although Poshmark was growing before 2020, the COVID-19 pandemic accelerated online retail, Chaddha said. He said he was pleased by the first-day trading gains.
“Our philosophy has always been to make money for every investor,†he said, adding that on “day one, what happens doesn’t really matter.â€
Poshmark’s backers, which include Menlo Ventures, Inventus Capital and GGV Capital, will continue to control most of the shareholder voting power, according to its filings.
Petco Health and Wellness Co. also jumped in its trading debut Thursday. The animal supply chain store, backed by investors including private equity firm CVC Capital Partners, climbed as much as 73% after raising $864 million in its IPO.
Poshmark’s listing was led by Morgan Stanley, Goldman Sachs Group Inc. and Barclays. The shares are trading on the Nasdaq Global Select Market under the symbol POSH.
