đź‘› Poshmark's double IPO pop

Friday, January 15, 2021 by Robinhood Snacks |
_Post-Posh Party_

Post-Posh Party

Yesterday’s Market Moves
Dow Jones
30,992 (-0.22%)
S&P 500
3,796 (-0.38%)
13,113 (-0.12%)
$39,204 (+4.89%)

Hey Snackers,

On Monday, stock markets are closed to celebrate the life of civil rights icon Dr. Martin Luther King Jr. There couldn't be a better time to honor his devotion to nonviolence, unity, and equality in America.

Yesterday, Biden unveiled the details of a $1.9T coronavirus stimulus proposal that includes $1.4K checks and boosted unemployment benefits.

PS: We'll be back in your inbox on Tuesday after MLK Day.


Not a Spice Girl... But Posh Spice would be proud. Poshmark is an online marketplace famous for used clothes, from $6 H&M tanks to $1K Louis bags. Yesterday, Poshmark stock made a splashy debut on the Nasdaq — we're getting DoorDash/Airbnb flashbacks.

  • Quick refresher: VIP investors buy at the IPO price. Based on public demand for the stock, it could open higher/lower when it actually hits the market. Spoiler...
  • Poshmark stock more than doubled from its $42 IPO price, opening at $97.50 and closing up 140%.

Thrifty is the new trendy... Like Etsy, Poshmark benefited from the pandemic e-thrifting surge. Sales jumped 28% to $193M in the first nine months of 2020 — and it even managed to turn a profit. From ThredUp, to The RealReal, there's no shortage of places to buy used clothes online. So what makes Poshmark different?

  • It's a social network... Posh lets you follow people and brands on a "shopping feed." You can like/comment/share that Lulu Vinyasa Scarf.
  • It thrives on engagement... In 2019, 87% of items purchased on Poshmark were preceded by a like, comment, or offer on its marketplace.
  • It's obsessed with community... Posh also hosts themed "Posh Parties," live virtual shopping events with curated "showrooms."

Social commerce's secret power = ad targeting... "Social commerce" sites are prime real estate for marketers because: 1) your engagement reveals your tastes, and 2) you're there to shop. That's partly why Facebook intro'd "Shops" on Insta. The more a company knows about your splurging habits, the more it can personalize ads. If Poshmark started selling ads, it could make significant $$$ from companies looking to target its 32M (mostly Millennial/Gen Z female) users.


Hire more fry cooks... Chip demand is extra hot right now. Ford literally had to shut down a plant this week because it can't find enough computer chips for its cars. Semiconductors are the backbone of electronics, powering everything from your smartphone to your washing mashing. Only problem? We've got a global semiconductor shortage on our hands.

  • All the WFH'ing... ate up all the chips. From Chromebooks, to PlayStations, to cloud computing everything — our pandemic needs called for a lot of semi-conducting.
  • That new car for the 'burbs... helped US car sales rebound quicker than expected. Ford isn't the only one who's chip-hungry: the average car contains 50 to 150 chips.
  • All those headlines about 5G... hyped up demand for 5G smartphones, which (spoiler) pumped up demand for 5G chips. 

Why so cyclical?... The semiconductor industry is driven by innovation cycles. In order to survive, companies have to constantly churn out new products as they race for the fanciest chip. By the time they've scaled production of the hottest new chip, there's a hotter new chip on the market... and then they have overstock. Meanwhile: chip size has shrunk to less than a nail clipping, while the costs of production have surged.


The industry is consolidating to prep for the next lull... between chip innovations. Chip companies are merging to cut costs, scale faster, and stay profitable (#synergy). In September, Nvidia said it was buying chip designer Arm for a whopping $40B. Then in October, AMD agreed to buy chip maker Xilinx for $35B. And Qualcomm just announced a $1.4B acquisition of a 5G chip startup. In this super high-volume, high-tech industry... you need to stay huge to stay competitive.

What else we’re Snackin’

  • Propose: President-elect Joe Biden unveiled an ambitious relief plan to help the economy — here's what's in it.
  • Pressure: Delta lost a massive ~$12.4B in 2020, its first annual loss since 2009 — but says it could return to profitability by summer.
  • Vax: Johnson & Johnson's one-shot-only Covid vaccine was found to be safe and promising, according to early trial data.
  • Rocket: Virgin Galactic stock jumped 20% after Cathie Wood's Ark Invest revealed it's launching a space-themed ETF.
  • Thread: Twitter is accused of "double-standards" for not banning Iran’s supreme leader for posting violence-glorifying tweets.


Authors of this Snacks own shares of: Delta

ID: 1481425