Poshmark Stock Surges After Buyout News

Secondhand and subscription clothing services are getting a boost after the news

Deputy Editor
Oct 4, 2022 at 10:39 AM
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Poshmark Inc (NYSE:POSH) stock is surging today, up 13.1% at $17.61 at last glance, after news that South Korea-based e-commerce company Naver is acquiring the online marketplace for $1.2 billion. Several retail competitors and clothing subscription services, such as ThredUp (TDUP) and Rent the Runway (RENT) are posting substantial rises after the update, with Jefferies noting that the bid shows "resale is a fast-growing and attractive industry." 

Wedbush said that the deal may have created a "floor" for the competitors, after downgrading POSH to "neutral" from "outperform" this morning. The firm also raised its price target to $17.50 from $14, saying that its current valuation seems "fair."  

The majority of analysts are bearish toward Poshmark stock, with nine of the 11 in coverage carrying a "hold" rating, and two a "buy." Plus, the 12-month consensus price target of $14.93 is a 15.4% discount to current levels. 

Unsurprisingly, options traders are circling POSH this morning. So far, 4,124 calls and 2,831 puts have crossed the tape, with overall volume running at 13 times the intraday average. The October 15 call is the most popular, with new positions being opened at the October 17.50 put. 

Today's pop has POSH breaking into positive territory for the year. The stock is now up 3.4% year-to-date, as support at the 10-day moving average continues to guide the stock higher. 

It's also worth noting that short interest represents 10.9% of the stock's available float. It would take over five days to buy back these bearish bets, at POSH's average pace of trading. 

 

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