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Digital market Poshmark (NASDAQ: POSH) put in a strong performance on its first day of trading Thursday. The writing was on the wall as the company initially planned to offer shares in the $ 35- $ 39 range, but investor enthusiasm for the high-end used retailer pushed the range. above on the eve of the IPO. Poshmark’s stock was ultimately priced at $ 42, but even at that higher sticker price, the company appears to have underestimated demand.
Investors were clamoring for shares before they even started trading, bringing the opening price to $ 97.50, 132% above the offer price. The shares started trading around 11:42 a.m. EST Thursday, coming out of the gate and never looking back. The stock ended the trading day at $ 101.50, gaining a spectacular 142% on the first day of trading.
Image source: Getty Images.
Poshmark’s website makes it easy to buy and sell second-hand fashion and luxury items, including clothing, shoes, and jewelry. What sets the e-commerce market apart from the competition, however, is the social aspect of the platform. It encourages socializing, helping the online bazaar to foster high engagement and increased sales.
The company reported that in 2019, active users were spending an impressive 27 minutes a day in its marketplace browsing, shopping, buying, selling and connecting with other users, which translates to 20.5 billion dollars. ‘social interactions.
This strategy seems to be working. In 2019, Poshmark generated revenue of around $ 205 million, up 38% year-over-year, although its net loss worsened 236% to $ 49 million.
The company appears to have reached a tipping point this year, however. In the first nine months of 2020, revenue grew 28% year-over-year to $ 193 million, and Poshmark was able to turn a profit, with a net profit of $ 21 million, against a loss of approximately $ 34 million over the prior year period.
Given Poshmark’s solid growth and recent shift to profitability, investors should add this second-hand market to their watchlist.
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