The new year is off to a busy IPO start. As The Exchange reported a few weeks ago, investors anticipate a busy Q1 IPO cycle, followed by a slower Q2 and a busy Q3 and Q4.
With Affirm releasing an initial IPO price range last night and Poshmark repeating the feat this morning, private-market investor expectations are holding up thus far.
Secondhand fashion marketplace Poshmark anticipates its IPO could price between $35 and $39 per share. Using its simple share count, the former startup could be worth nearly $3 billion. So, we’ve seen two multi-unicorns set early pricing terms this week: that’s comfortably busy.
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As we did with Affirm, we’ll dig into Poshmark’s new pricing interval, calculate valuations for the company using both simple and fully-diluted share counts, and figure out how they compare to its most-recent financial results and final private valuation. For the last bit, we’ll pull from PitchBook data and the S-1/A filing itself.
But for those of you in a hurry, the short gist is that for Mayfield, GGV, Menlo Ventures, Inventus Capital, and Temasek, the company’s first pricing estimate looks like a win.
If you want to read our first dig into the company’s IPO filing that is more focused on performance than pricing, head here. Let’s go!
Poshmark’s hugely “up” IPO
Poshmark’s $35 to $39 per-share IPO price interval could change, but even if it fails to rise, the company’s implied valuation is a dramatic step up from prior rounds.
For example, the company’s S-1 filings note that during its 2017 venture round — the last that it raised per the IPO filing and PitchBook data — Poshmark sold shares at $8.3729 per share. That’s a fraction of the price that the company now expects public-market investors to pay.
As with Affirm, let’s calculate Poshmark’s valuation using both simple and fully-diluted share counts. The latter takes into account shares that have been earned, but not yet exercised or converted.
Here’s the company’s valuation range using a simple share count, inclusive of its underwriters’ option to purchase 990,000 shares at its IPO price:
- Poshmark valuation, low-end of range: $2.60 billion
- Poshmark valuation, high-end of range: $2.90 billion
If we expand the company’s share count to include vested options and RSUs, the numbers go up. Again, the following math is inclusive of the underwriters’ option:1
- Poshmark valuation, low-end of range: $2.95 billion billion
- Poshmark valuation, high-end of range: $3.29 billion
So, are those good numbers? Yes.
