Poshmark Makes its Public Debut
The IPO Market Shows No Signs of Slowing Down
Poshmark (POSH), an online marketplace specializing in clothing and accessories, made its public debut yesterday. The company priced its shares at $42 each—above its initial target range of $35 to $39. At the end of the trading day its shares were up almost 150%.
As 2020 came to a close, the IPO market was roaring with blockbuster debuts from companies like Airbnb (ABNB) and DoorDash (DASH). So far in 2021, it shows no signs of slowing down. Shares of online payments company Affirm (AFRM) surged almost 100% on Wednesday. Pet supply company Petco (WOOF) also had a successful IPO yesterday.
Poshmark’s Business Model
Poshmark is a platform which connects buyers and sellers much like eBay (EBAY) or Etsy (ETSY). To make money, these companies take a cut of each transaction. On Poshmark users can buy and sell anything from $15 coffee cups to $3,000 handbags.
Poshmark currently has 31.7 million active users. Over the first three quarters of 2020, the company’s revenue was $192.8 million—a 28% increase compared to the same period a year prior. Poshmark also made a profit of $20.9 million during the first three quarters of 2020 after losing $33.9 million the previous year.
Looking Ahead
The majority of Poshmark’s users are millennials or members of Gen Z. This means that if the platform is able to retain this audience and continue to attract new, younger users, it could be poised for growth.
Poshmark has seen a spike in its user numbers during the pandemic for a number of reasons. Both buyers and sellers are at home looking for ways to entertain themselves. More people are buying clothing online because they are not visiting brick-and-mortar stores as frequently. Additionally, people are selling clothing online to make extra money at a time of economic downturn.
Poshmark’s leadership expects that though the pandemic has led to a unique set of favorable conditions for the platform, it could see even more growth in the year ahead. If vaccine rollout is successful and social distancing measures can be reduced, Poshmark users may be eager to buy clothing when they return to in-person work and school.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21011502
All your finances.
All in one app.
App Store rating
