ThredUp’s shares pop in stock market debut

6 mins read
ThredUp's shares pop in stock market debut


In this March 12, 2019, file photo thousands of garments are stored on a three-tiered conveyor system at the ThredUp sorting facility in Phoenix. Shares of ThredUp rose 30% in their stock market debut Friday, March 26, 2021, reflecting investor enthusiasm for the online marketplace for second-hand fashion goods. (AP Photo/Matt York, File)

NEW YORK (AP) — Shares of ThredUp rose 30% in their stock market debut Friday, reflecting investor enthusiasm for the online seller of second-hand women’s and children’s clothing.

The stock market debut followed strong investor enthusiasm for Poshmark Inc., whose stock more than doubled to $101.50 valuing the company at $7.4 billion in its showing on Jan. 14. However, Poshmark’s shares have come down more than 60% since then.

Late Thursday, ThredUp’s initial public offering of 12 million shares was priced at $14 apiece, the high end of its estimated range of $12 to $14, according to a statement by the company. That raised about $168 million before underwriting fees. The shares, opened at $18.25 late Friday morning on the Nasdaq Global Select Market under the symbol “TDUP.” Shares ticked up to $18.48 by mid-day.

“I am thrilled with how the stock is being received, but it’s just one day and we have great years of opportunity in front of us,” said James Reinhart, the co-founder and CEO of ThredUp, during an interview with The Associated Press Friday.

Reinhart said that the proceeds from the initial public offering will be used to invest in software at its facilities, while expanding beyond the U.S. to possibly Europe.

ThredUp’s debut comes as the resale market has been strong even during the pandemic, benefiting from shoppers’ accelerated shift online and customers’ steadfast focus on second-hand goods as they become more conscious about the environment. The total resale market reached $28 billion in 2019 and should increase to $64 billion by 2024, according to research from GlobalData commissioned by ThredUp.

ThredUp, based in Oakland, California, calls itself a “managed” marketplace, for sellers, including managing pricing, merchandising, fulfillment, payments and customer service. With this model, it believes it attracts high-quality supply without directly spending money to acquire sellers. ThredUp sellers can order a clean out kit, fill it and return it using the company’s prepaid label. ThredUp then takes it and gets it ready for resale. In comparison, Poshmark is a social marketplace where users buy and sell directly with each other and interact,

Since its founding in 2009, ThredUp, which features a diverse array of labels from Gucci to Gap, has processed more than 100 million unique secondhand items from 35,000 brands across 100 categories. Its facility has capacity to hold up to 5.5 million items and process up to 100,000 a day. As of Dec. 31, it had 1.2 million active buyers and 428,000 active sellers. The company also has partnerships with 21 retailers including Walmart.

The company’s revenue was $186.0 million in 2020, up 14% over 2019, according to its filing with the Securities and Exchange Commission. Its net loss widened to $47.9 million in 2020, from $38.2 million in 2019.

Reinhart declined to offer AP a specific timeline for when ThredUp will be profitable but he said the “market opportunities are huge.”

__________

Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Companies Mentioned in This Article

Compare These Stocks  Add These Stocks to My Watchlist 

7 Food Stocks That Are Leading Through Innovation

It might be easy to dismiss food stocks with so many restaurants still struggling to recover from the global pandemic. But food stocks are a broad category that includes not only the way food is consumed but the way it’s made. In 2020, sustainability and a focus on climate change continue to be important trends in this sector.

Another trend to look at is the ability of companies to deliver food to consumers. It’s not surprising that some of the biggest winners in the pandemic are the restaurants that already had a strong digital presence. Consumers’ ability to have a contactless experience from start to finish has been a catalyst for some stocks.

Not surprisingly, those are also the trends that create an opportunity for investors looking to dabble in food stocks. As you look to resetting your portfolio for 2021, it may be time to take a bite out of some of these stocks.

With that in mind, we’ve put together this special presentation that identifies seven food stocks that you should consider adding to your portfolio. In addition to gaining exposure to this sector, some of these stocks present the opportunity for industry-beating gains.

View the “7 Food Stocks That Are Leading Through Innovation”.