Poshmark Shares Make Public-Market Debut at $97.50

Poshmark Inc.’s

POSH 122.31%

stock more than doubled in its trading debut Thursday, reflecting a soaring market for public offerings and expectations that demand for secondhand goods sold online will grow after the economy returns to more normal conditions.

Shares of the online marketplace focused on used merchandise opened at $97.50, according to FactSet, above the company’s initial public offering price of $42. That better-than-targeted IPO price valued the company at more than $3 billion, up from a $1.25 billion valuation in 2019.

Private companies have been looking to cash in on robust demand from investors for new listings. Companies raised more than $167 billion on U.S. exchanges last year through Dec. 24, compared with the full-year record for funds raised through IPOs in 1999, during the dot-com boom, according to Dealogic.

Last month,

Airbnb Inc.

shares more than doubled in their trading debut, while

DoorDash Inc.’s

stock surged 86% in the food-delivery company’s offering. Some investors have questioned the valuations that technology companies are commanding, because the high prices suggest that investors are betting on strong growth in the years ahead. Not all newly listed companies have seen their shares jump.

Poshmark enlists consumers to sell all manner of apparel, shoes, beauty items and other merchandise on a digital marketplace. The Redwood City, Calif., company collects a 20% fee for sales of at least $15 and $2.95 for sales lower than that price, and it doesn’t buy inventory.

The company generated $192.8 million in revenue during the first nine months of last year, up 28% compared with the same stretch in 2019, according to the prospectus for its stock sale. Poshmark said it earned a profit for that period in part because it reduced spending on marketing, but reported annual losses for 2019 and the year earlier.

Poshmark describes itself as a social marketplace and works to keep consumers using its platform by making it feel similar to scrolling through social-media operations like Instagram. As of the end of last September, Poshmark had about 32 million active users.

The company faces competition from rivals like online-thrift store thredUP Inc. and luxury retailer Mytheresa Group, both of which plan to go public. Digital-consignment company The

RealReal Inc.

sold shares in a public offering in 2019 and is now valued at roughly $2.4 billion. Shares of RealReal ended their first day in the public markets at $28.90, higher than their IPO price, and traded at $27.96 Thursday.

Traditional apparel-retail chains, meanwhile, have also looked to enhance their ecommerce operations and sell secondhand goods.

Write to Micah Maidenberg at [email protected] and Charity L. Scott at [email protected]

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