Shares of mattress company Purple Innovation (NASDAQ: PRPL) skyrocketed on Monday after the company confirmed that it has received an official buyout offer. As of noon ET, Purple stock was up a whopping 42% and some pundits believe it could shoot higher still.

According to the official press release, Coliseum Capital Management is offering to buy Purple for $4.35 per share. That's only about 10% above where the shares were trading as of this writing. However, it's a substantial 58% premium to where shares closed Friday. 

On one hand, a 58% buyout premium looks exciting for Purple shareholders. However, it's more depressing when zooming out. For nearly all of Purple's history as a public company, the stock has been well above this buyout bid, and after a strong rise during the pandemic's first year briefly traded above $40 per share in early 2021. If Purple's board of directors accepts this unsolicited offer from Coliseum Capital Management, it would lock in roughly 90% losses for those who bought at the all-time high.

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Source Fool.com