It’s safe to say this year hasn’t gone as planned for many of the online retailers that have gone public over the past 12 months. The stocks of Poshmark, Wish and Rent the Runway are each trading below their IPO prices, a sign that investors misjudged the prospects for these denizens of e-commerce. Wednesday’s sudden departure of Wish founder and CEO Piotr Szulczewski, after reporting a 39% drop in third-quarter revenue, captured just how badly some of these companies have missed the mark.
There’s no simple explanation for what went wrong. One factor is that while Covid-19 drove more shoppers online, some retailers didn’t hold onto that extra business. Wish, for instance, found that the lift in sales sparked by the pandemic dissipated as soon as people were free of lockdowns. Its stock is now trading 76% below its IPO price. Rent the Runway, in contrast, never enjoyed a pandemic lift in sales in the first place. Its IPO valuation was simply too high, which investors have now corrected by pushing its shares 15% lower.
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