What's going on?

Mattress company Casper listed its shares on the US stock market on Thursday � and wide-awake investors took advantage of its reduced valuation, pushing its stock up as much as 29%.

What does this mean?

Last year, venture capital firms valued Casper at a massive $1.1 billion. But in the lead-up to its initial public offering (IPO), investors hit the proverbial snooze button. They were concerned about its huge losses � $233 million since 2017 � and the sheer amount of competition in the bed-in-a-box market.

After tossing and turning, Casper decided to initially target a $700 million-plus valuation. When investors still didn�t stir, it cut its price again � to around $500 million � and again, to $476 million. That perked investors up: they bought in, and Casper ultimately raised $100 million. And when the mattress company�s stock publicly traded for the first time on Thursday, its shares had a bright start to the day.

Why should I care?

For markets: Get �em while they�re cheap.
In an IPO, a soon-to-be public company tries to convince investors of its value, hoping they�ll agree to buy its shares for an agreed-upon price the night before it goes public. In this case, that price was $12 per share � which immediately went up in value on Thursday. That�s great news for investors who bought at a discount, but not for Casper, which could�ve sold its shares for a lot more.

Zooming out: Too big, too fast.
Over the last decade, low interest rates have sent many investors to venture capital, which funds risky but high-growth ideas. That’s worked out for some: think Sequoia Capital�s 4900% return on WhatsApp. But with so many investors competing for the hottest ideas, startup valuations have been driven to potentially unsustainable levels. That might be why public investors refused to accept Uber, Lyft, and now Casper�s private valuations at face value. Airbnb, set to go public later this year, will be hoping to avoid the same fate�