Poshmark (POSH) is ready for its next chapter after South Korean internet company Naver agreed to buy the peer-to-peer digital marketplace for $1.2 billion in cash on Tuesday.
“It’s a great win for our shareholders, it’s a great win for our employees, and ultimately, it’s a very good win for our community,” Poshmark CEO Manish Chandra told Yahoo Finance Live (video above). “By bringing Poshmark and Naver together, we actually invest in the right way, we accelerate growth, and, ultimately, build a much bigger and much more global Poshmark.”
Poshmark, which operates a secondhand goods marketplace that digitizes the consignment experience, made its public debut in January 2021, listing its shares at $42 for a total valuation of over $3 billion. Since then, Poshmark stock has plummeted along with other 2021 IPO and SPAC names.
Those lower valuations have attracted potential buyers, such as Naver, who purchased Poshmark for $17.90 per share. That sale price represents a 15% premium to Poshmark’s closing stock price as of Oct. 3.
And although some investors questioned the timing of the acquisition, Poshmark and Naver touted a number of synergies between the companies, such as the combination of Poshmark’s 80 million registered users and Naver’s 28 million monthly users across its social networking and discovery-based shopping platform.
“We have seen the market being extremely volatile the last year and a half,” Chandra said. “So from a timing perspective, it really did make sense to bring the two businesses together now.”
The acquisition also marks Naver’s entrance into the North American resale industry. Data from Activate Consulting estimates that the U.S. online re-commerce industry is an $80 billion market today and is projected to reach $130 billion by 2025.
Once the deal closes, Poshmark will continue operations as its own entity but won’t have to navigate market volatility as a publicly traded company. Chandra, who founded Poshmark, will continue to run the company for the foreseeable future.
“I’m not going anywhere,” the CEO said. “We will continue to build Poshmark. In fact, part of the partnership is that they are keeping Poshmark as an independent subsidiary, so I feel it’s a phase in the journey as opposed to the end of a journey.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.
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