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Here is why Casper Sleep Inc. (CSPR) stock surged on Wednesday?

Casper Sleep Inc. (CSPR) shares rose 11.17% in after-hours on Wednesday, January 19, 2022, and closed the daily trading at $6.37. Even in the regular trading session of Wednesday, CSPR’s stock gained 10.19%. CSPR shares have fallen 19.97% over the last 12 months, and they have moved down 11.16% in the past week. Over the past three months, the stock has gained 29.05%, while over the past six months, it has declined 19.64%.

Let’s have a look at its recent news and developments.

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Merger agreement approved by CSPR shareholders

On January 19, 2022, stockholders of Casper Sleep Inc. (CSPR) voted in the favour of a merger agreement whereby Casper will be acquired by certain subsidiaries of Durational Consumer SPV IV, LP.

At Casper’s Special Meeting of Stockholders, approximately 69.5% of the vote represented by Casper’s outstanding stock were voted in favor of the Merger agreement. The final voting results of the Special Meeting, as tabulated by an independent inspector of elections, will be filed as part of Form 8-K with the U.S. Securities and Exchange Commission.

Background of Merger

On November 15, 2021, Casper Sleep Inc. entered into a definitive agreement to be acquired by Durational Capital Management LP (Durational). According to the agreement, Casper common stockholders will receive cash consideration of $6.90 per share, representing a 94% premium to the closing share price on November 12, 2021, the last trading day before this announcement, and a premium of approximately 80% to the 30-day volume-weighted average price ending November 12, 2021.

CSPR latest financial results

On November 15, 2021, Casper Sleep Inc. (CSPR) announced financial results for the quarter that ended September 30, 2021.

Q3 2021 financial highlights

  • CSPR reported total revenue of $156.5 million for the third quarter of 2021 compared to $123.5 million in Q3 2020.
  • The total cost of revenue was $92.6 million compared to $55 million in Q3 2020.
  • In Q3 2021, gross profit was $63.9 million compared to $68.5 million in Q3 2020.
  • Total operating expenses were $86.96 million compared to $82.3 million in Q3 2020.
  • It suffered a net loss of $25.3 million in Q3 2021 compared to a net loss of $15.8 million in Q3 2020.
  • Adjusted EBITDA was negative $12.1 million in Q3 2021, compared to a loss of $7.5 million in Q3 2020.
  • The company ended the third quarter with cash and cash equivalents of $43.1 million.

Conclusion

The recent approval of the merger agreement with stockholders was the reason behind its exceptional performance on Wednesday. we can expect it to further surge in the coming trading sessions.

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