What happened
Shares of Casper Sleep (CSPR) were soaring 10.8% higher heading into noontime trading Wednesday after Seeking Alpha reported shareholders of the mattress stock had approved the sale of the company to hedge fund operator Durational Capital Management.
While the stock had soared last November after the offer to buy the sleep specialist was announced, its shares had fallen sharply this month after a short seller expressed doubts about Durational's ability to finance the deal.
Image source: Getty Images.
So what
Casper is going private barely two years after it made a big splash on the market with an IPO that quickly devolved into a cash-burning disaster. Investors have had nightmares about its recurring losses when much of the competition was profitable. It had been careening toward penny stock status before Durational rescued the mattress stock last November with an offer to buy it for $6.90 per share.
That was nearly double the price Casper was trading at prior to the acquisition announcement, but well below its $12 IPO price.
Now what
Casper Sleep's board of directors had previously approved the acquisition unanimously, and it noted the deal was not subject to a financing condition, and Durational has committed debt financing led by KKR's Credit and Callodine Commercial Finance.
