Connect with us


Cramer worries about Casper's staggering losses in the 'post-WeWork apocalypse' IPO climate – CNBC



CNBC’s Jim Cramer expressed concerns about the fundamentals of Casper Sleep‘s business ahead of the online mattress startup’s Thursday debut as a publicly traded stock.

Shares opened at $14.50, an over 20% increase from its offering price.

“The losses here are staggering” for the business, Cramer said on “Squawk on the Street.”

Casper, which started out selling mattresses on the internet five years ago, lost $92.1 million in 2018 and $73.4 million in 2017 on net revenues of $357.9 million in 2018 and $250.9 million in 2017. Casper has both high-profile investors, such as actor Leonardo DiCaprio, and high-profile partnerships with the retailers such as Costco and Amazon.

The New York-based company announced plans for an initial public offering in early January and had initially planned to price its shares between $17 and $19.

However, Casper ended up pricing its IPO on Wednesday evening at $12 per share, giving the company a market value of $476 million. That’s dramatically lower than the $1.1 billion valuation from its latest round of private funding.

“They may have priced it to move,” the “Mad Money” host said, referencing a strategy in which companies lower their offering price in hopes of creating a first-day pop, which indeed happened.

“You cut and cut and cut; you can get a deal to work, any deal to work,” he added. If shares are priced too high on their first day, they could fall and create less-than-ideal optics.

Philip Krim, 36, co-founder and CEO of Casper later told CNBC on Thursday that “valuations are moments in time” and his focus is on the future and growing the company.

Appearing on “Squawk Alley” shortly after the stock opened higher, Krim said, “I feel awesome. It’s been a great day. It’s an awesome milestone for Casper. So I’m pumped.”

Casper’s IPO is taking place in a “post-WeWork apocalypse” world, Cramer said.

The WeWork saga is viewed by many as a turning point for how public market investors view money-losing startups, helping to shift focus away from growth at all costs and reemphasizing the bottom line and a path toward profitability.

The coworking company pulled its IPO and booted its CEO, Adam Neumann, in September following backlash over WeWork’s governance and valuation ahead of its expected offering. WeWork had picked up a $47 billion valuation in the private markets, but some public investors came to value the company as low as $10 billion.

Cramer said he thought Casper ultimately was wise to lower its price-per-share targets before it began trading to avoid the pitfall of tighter valuation scrutiny in the current climate in the public markets.

“This is one of those deals where if they had brought it higher it would have been crushed,” he said. “They really have been very good about where to do it. It’s a very small deal.”

While Casper began selling mattresses online through a direct-to-consumer model, it has since 60 opened retail stores, with goals to have upwards of 200. It also expanded its product offerings to include bedroom furniture and fixtures such as pillows and lamps.

But Cramer cast doubt on long-term demand around Casper’s core product. “It’s a bed that is mailed … It’s not exactly Clorox wipes when you’re on a subway car, in terms of demand.”

Cramer also weighed-in on Twitter on Casper’s IPO before the stock market opened Thursday.

Let’s block ads! (Why?)

Source link


Oil Prices Rally As Traders Focus On Tight Supply Outlook –



Oil Prices Rally As Traders Focus On Tight Supply Outlook |

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for, and a member of the Creative Professionals Networking Group.

More Info

Trending Discussions

Premium Content

  • WTI crude rallied almost 3.5% on Thursday morning.
  • Tight supply and falling U.S. crude oil inventories support prices.
  • U.S. crude oil inventories are now 6% below the 5-year average.

Drilling rig

Crude oil prices resumed their climb on Thursday, reclaiming some of the ground lost over the last month.

At 1:30 p.m. ET, the WTI benchmark was trading at $91.09, a 3.38% gain on the day. WTI prices are still down from the $100+ barrel mark seen last month, as recession fears took hold of the market, threatening to subdue crude demand growth.

Crude oil prices are still nearly $20 over where they were at the start of the year, and roughly $28 per barrel gain over the last 12 months.

While recession fears—and the possible demand destruction that could come with such a recession—has pulled down prices over the last month, market fundamentals continue to be tight, with crude oil inventories in the United States continuing to slide. On Wednesday, the EIA estimated that crude oil inventories had fallen by 7.1 million barrels, on top of millions of barrels of crude oil making its way out of the nation’s Strategic Petroleum Reserves. Gasoline inventories in the United States also fell by another 4.6 million barrels for the week ending August 12, the EIA reported on Wednesday.

U.S. crude oil inventories, excluding those in the SPR, are now just 425 million barrels,–6% below the five year average. Gasoline inventories are 8% below the five-year average, and distillates are 23% below the five-year average.

The EIA data also calmed fears that gasoline demand could be falling, after it showed the four-week average of implied gasoline demand rose to the highest level this year.

Also on Thursday, U.S. economic data saw a stronger labor market, further bolstering crude prices.

Disappointing economic data out of China this week—a predictor of lower crude demand from the world’s largest oil importer, has capped oil’s increase, as has a stronger dollar, which makes crude oil more expensive for foreign buyers.

By Julianne Geiger for

More Top Reads From

Download The Free Oilprice App Today

Back to homepage


Trending Discussions


Related posts

Adblock test (Why?)

Source link

Continue Reading


TD faces public scrutiny, support, of First Horizon takeover in public meeting – Business News –



TD Bank Group’s proposed takeover of Memphis-based First Horizon Bank is the issue before a public meeting Thursday where community members are being given a forum to voice their opinions on the deal.

The virtual meeting is being convened jointly by the Federal Reserve Board and the U.S.Office of the Comptroller of the Currency, which are reviewing the proposed US$13.4 billion deal.

The meeting comes as TD has faced renewed criticism in recent months for allegedly aggressive sales tactics in the U.S., including from Senator Elizabeth Warren who has called for the merger to be blocked until the bank is “held responsible for its abusive practices.”

TD agreed to a US$122 million settlement with U.S. regulators in 2021 stemming from illegal overdraft practices, while an investigative report released in May alleged that problematic practices continue at the bank, something the bank had strenuously denied.

The federal agencies also held a public meeting in mid-July for BMO’s proposed US$16.3 billion takeover of Bank of the West, where numerous community groups urged the deal be blocked until a strong community benefits agreement can be reached.

The bank also faced criticism for the proportionately low number of mortgages granted to Black and Latino borrowers, while numerous community groups that have received funding from BMO voiced their support of the deal.

Adblock test (Why?)

Source link

Continue Reading


Judge sides with Enbridge Inc. in Michigan’s latest effort to halt Line 5 pipeline



WASHINGTON — The international dispute over Line 5 belongs in federal court, a Michigan judge declared Thursday, dealing a critical blow to Gov. Gretchen Whitmer’s bid to shut down the controversial cross-border pipeline.

It’s the second time in nine months that District Court Judge Janet Neff ruled in favour of pipeline owner Enbridge Inc., which wanted the dispute elevated to the federal level.

That first decision prompted Michigan Attorney General Dana Nessel — believing her only path to victory to be in state court — to abandon the original case, turning instead to a separate, dormant, nearly identical circuit court case to try again.

Neff’s disdain for that tactic was palpable throughout Thursday’s ruling.

“The court concludes that (the) plaintiff’s motion must fail, based on …(the) plaintiff’s attempt to gain an unfair advantage through the improper use of judicial machinery,” Neff wrote.

“The court’s decision … is undergirded by (the) plaintiff’s desire to engage in procedural fencing and forum manipulation.”

A spokesperson for Nessel did not immediately respond to media inquiries.

Whitmer is a Democrat and close ally of President Joe Biden whose political fortunes depending on the support of environmental groups in the state. She ordered the shutdown of Line 5 in November 2020.

She cited the risk of an ecological disaster in the Straits of Mackinac, the environmentally sensitive passage between Lake Michigan and Lake Huron where the pipeline runs underwater between the state’s upper and lower peninsulas.

They went to circuit court, where Enbridge pushed back hard, arguing that Whitmer and Nessel had overstepped their jurisdiction and that the case needed to be heard in federal court.

Late last year, Neff sided with Enbridge, prompting Whitmer and Nessel to abandon the complaint and try again, this time with a similar circuit court case that had been dormant since 2019.

Nessel had hoped to head off Enbridge’s jurisdictional argument on a technicality: that under federal law, cases can only be removed to federal jurisdiction within 30 days of a complaint being filed.

But Neff wasn’t buying it, citing the precedent she herself established in 2021 when she ruled for Enbridge the first time.

“It would be an absurd result for the court to remand the present case and sanction a forum battle,” Neff wrote.

“The 30-day rule in the removal statute is intended to assist in the equitable administration of justice and prevent gamesmanship over federal jurisdiction, but here, it is clear to the court that (the) plaintiff is the one engaging in gamesmanship.”

The Line 5 pipeline ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U. S. border and the Great Lakes by way of a twin line that runs along the lake bed.

Critics want the line shut down, arguing it’s only a matter of time before an anchor strike or technical failure triggers a catastrophe in one of the area’s most important watersheds.

Proponents of Line 5 call it a vital and indispensable source of energy, especially propane, for several Midwestern states, including Michigan, Ohio and Pennsylvania. It is also a key source of feedstock for refineries in Canada, including those that supply jet fuel to some of Canada’s busiest airports.

In a statement, Enbridge described Thursday’s decision as “consistent with the court’s November 2021 ruling that the state’s prior suit against Line 5 belonged in federal court.”

That, the company said, is the correct forum for “important federal questions” about interstate commerce, pipeline safety, energy security and foreign relations.

The statement goes on to say that shutting down Line 5 would “defy an international treaty with Canada that has been in place since 1977.”

Line 5 talks between the two countries under that treaty, which deals specifically with the question of cross-border pipelines, have been ongoing since late last year.

“Enbridge looks forward to a prompt resolution of this case in federal court.”

This report by The Canadian Press was first published Aug. 18, 2022.


James McCarten, The Canadian Press

Continue Reading