Poshmark (POSH) had a great run at the beginning of 2021 – closed at $101.5 per share on its first day (Jan 14), or 142% higher than its IPO price of $42.
On March 29, ThredUp (TDUP) went IPO with $14 listing price, closing its first day at $31.4 per share, or 124% higher.
Capital reacts fast in China as Zhuanzhuan raised $390 million on Apr 1. Zhuanzhuan was from Wuba and raise $300 in Sep 2019. In May 2020, Zhuanzhuan merged with Zhaoliangji, with post-merger valution of $1.8 billion.
However, valuations seem to be rich.
A long RealReal (REAL) short Poshmark (POSH) trade would return more than 13% in four week (March 4 – April 1).
Poshmark was trading at 10x forward rev while RealReals is below 5x.
If short was implemented right before Poshmark’s earnings on Mar 11, which disappoints, return would be 29%.
2020 revenue
Poshmark: $262.1mn
RealReal: $299.9mn
ThredUp: $186.0mn
Btw, these companies are not growing crazy at 50% or above – CAGR for the next 3 years is like 30%.