The RealReal Inc: Fashion Fad or Long-Term Investment?

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Case

Reference no. 9B20N035

Subject category: Finance, Accounting and Control

Authors: Shernaz Bodhanwala (FLAME University); Ruzbeh Bodhanwala (FLAME University)

Published by: Ivey Publishing

Originally published in: 2020

Version: 2020-09-21

Length: 24 pages

Data source: Published sources

Topics: Valuation; Online marketplace; IPO; Start-up; Finance; Entrepreneurship; International

Share a link: https://casecent.re/p/172279

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Abstract

The RealReal Inc (Real), a San Francisco, California-based start-up engaged in the trade of used luxury goods, experienced significant growth in its revenue and customer base in fiscal year (FY) 2018, but it was yet to turn profitable after nine years in the business. The reported accumulated losses until the quarter ended March 2019 were USD280.98 million. On June 27, 2019, Real launched its initial public offering (IPO) at USD20 per share. Would investing in the company be worthwhile for investors? What parameters would realistically indicate the future prospects of an emerging growth company like Real?