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.
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.
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.