Shares of Poshmark (POSH) soared more than 140% during the first minutes after its public debut. Shares of the social marketplace for second-hand goods opened at $97.50, about 130% higher than its IPO price of $42 each.
Poshmark made its public debut on the same day as Petco Health and Wellness (WOOF). Shares of the pet care company opened at $26 each on Thursday, about 44% higher than the company’s IPO price. This week the public markets also welcomed Affirm (AFRM), the online payments company. Shares of Affirm soared more than 90% on Wednesday.
Poshmark was founded in 2011 to create a marketplace for sellers and buyers of second hand clothing, shoes, jewelry and other products. As of September 30, 2020, Poshmark had 31.7 million active users, 6.2 million active buyers, and 4.5 million active sellers.
The company achieved its first quarter of profitability for the three months ended June 30, 2020, according to its S-1 filing
The company takes a fee from each successful transaction that is conducted on its marketplace. In the quarter ended September 30, 2020, Poshmark generated revenue of $68.8 million, along with net income of $10.8 million, and adjusted EBITDA of $15.0 million.
‘The future of online shopping is social’
Poshmark highlights the increasing trend of online shopping through social networking writing ”from the seller perspective, people continue to find ways to pursue their passions with a digital ‘side-hustle’ or as digital entrepreneurs.”
The company generates organic marketing by word-of-mouth and from users who share their listings across other social media channels like Facebook (FB), Instagram, Pinterest, Snapchat (SNAP), TikTok, and Twitter (TWTR).
Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre