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Illustration: Aïda Amer/Axios

Casper Sleep, the mattress retailer that was valued at more than $1 billion by venture capitalists, last night priced its IPO at the bottom of an already-slashed price range.

Reality check: Yes, this went just about as badly as most of us thought it would. No, it shouldn't be used as an avatar for the broader IPO or DTC markets.

Bad bed: Casper originally filed to price shares at between $17-$19, which already signaled a bit of a valuation haircut. Then it slashed the range to $12-$13, with insiders NEA and IVP agreeing to buy around 10% of the float (a very unusual move for VCs, outside of biotech). It ended up pricing at just $12 per share, for an initial market cap of $476 million and a fully-diluted value of around $547 million.

History: Casper held sales talks in 2017 with Target. What happened next depends on who you talk to. One version is that Casper walked after Target came about $100 million short of its $1 billion asking price. Another version is that Target never formally bid, after concluding it was uncomfortable with owning a long replacement cycle product that takes up lots of floor space.

  • Target did end up making a minority investment, either because it still thought the company had upside (version #1) or as a make-good (version #2).

Investor reaction: This is an unprofitable consumer product company whose IPO prospectus seems to suggest that it discovered people like to have a buffer between themselves and the floor. It has a ludicrously generous return policy that mainly benefits landfill owners, and doesn't break out its non-mattress product sales.

  • Plus, it has tons of competition ⁠— from the high end to low end, upstart to incumbent. One of those upstart rivals, Purple, has slightly higher revenue and a market cap just north of $700 million.

The big picture: Casper began life as a direct-to-consumer company and, like many other DTC startups, has expanded into physical retail (both third party and its own branded stores). But that's where many of the similarities end.

  • As Target realized, mattresses have very long replacement cycles. Even if you love your Casper mattress, chances are you don't plan to buy another one for years (maybe even a decade). It's more like luggage than shoes or makeup, let alone like software.
  • That's why Casper has worked to expand its product line into peripherals that range from bed-sheets to CBD gummies (to help you sleep). But Casper's decision to not provide data into how these other offerings have fared is not encouraging.
  • On the broader IPO front, two other companies this morning will list after pricing at the top of their range.

The bottom line: Conventional wisdom was right, but too much extrapolation would be wrong.

Go deeper: Casper falls below unicorn status in new IPO filing

Go deeper

Cyberattack forces shutdown of major U.S. fuel pipeline

A police officer stands guard inside the gate to the Colonial Pipeline Co. Pelham junction and tank farm in Pelham, Alabama, in 2016. Photo: Luke Sharrett/Bloomberg via Getty Images

A major U.S. fuel pipeline running from Texas to New York has been taken offline by its operator because of an apparent cyberattack.

The big picture: Colonial Pipeline "carries 45 percent of the East Coast’s fuel supplies," the N.Y. Times reports.

Bryan Walsh, author of Future
1 hour ago - Health

The end of quarantine

Illustration: Annelise Capossela/Axios

Long quarantines were a necessary tool to slow the COVID-19 pandemic during its first phases, but better and faster tests — plus vaccines — mean they can be scaled back considerably.

Why it matters: Quick tests and regular surveillance methods that identify who is actually infectious can take the place of the two-week or longer isolation periods that have been common for travelers and people who might have been exposed to the virus, speeding the safe reopening of schools and workplaces.

Amazon rollups are the hottest deals

Illustration: Aïda Amer/Axios

A new generation of companies is forming to scoop up Amazon marketplace sellers — and venture capital firms are writing big checks to support the effort.

Why it matters: These e-commerce aggregators are all about data and using it to optimize and turbocharge sales, which means they’re using Amazon’s own playbook.