Poshmark stock doubles after IPO — it's social media, but for ecommerce
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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.