By Alan Wolf, YSN

Bed-in-a-box pioneer Casper Sleep caused quite a stir last year when it announced its plans to go public.

The direct-to-consumer company initially indicated a price range of $17 to $19 a share for its initial public offering (IPO), giving it a valuation of roughly $760 million. That was well below the $1.1 billion valuation implied by private investors in a private funding round last March.

Ultimately, the starting price for last week’s IPO was $12, valuing Casper at less than $500 million and prompting CNN to describe its public debut as “officially a disaster.” And despite a modest first trading-day bump, it was languishing at less than $10 a share as of this writing.

What took the spring out of Casper’s step? According to the The New York Times, investors recoiled at the sea of red ink revealed in last month’s public filing. Specifically, the company lost $67 million during the first nine months of 2019 on sales of $312 million— thanks in part to a $114 million marketing spend — and was on track to lose more for all of 2019 than it had the year before, the prospectus showed.

Another concern is Casper’s dependence on a handful of U.S. manufacturers for its foam mattresses, including one major contractor, Leggett & Platt, that also supplies such competitors as Leesa, Tempur Sealy and Serta Simmons, the New York Post reported.

Casper’s beds-in-a-box also face an increasingly crowded marketplace filled with private-label entries from Walmart, Amazon, IKEA and BrandSource. And while the six-year-old startup claims its mattresses employ a proprietary mix of latex and foam that’s protected by multiple patents, the prospectus concedes that it “may not be able to prevent” competitors from imitating its products and technology.

Little wonder, then, that investors threw a wet blanket on this bedding longshot.

BrandSource is a unit of YSN publisher AVB Inc.