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Bloomberg
Software maker CrowdStrike Holdings Inc. soared in its trading debut after raising $612 million in one of the biggest-ever initial public offerings for a cybersecurity company.
Shares opened at $63.50 in New York and rose as much as 97 percent from their IPO price to $67. The stock closed up 71 percent to $58. That valued the company at about $11.41 billion, almost quadruple its $3 billion valuation last June when it raised about $200 million in a private funding round.
CrowdStrike sold 18 million shares at $34 each, above its already elevated target range, the company said in a statement confirming an earlier report by Bloomberg. The Sunnyvale, California-based company had marketed the shares for $28 to $30, a target range it had earlier raised from $19 to $23.
Founded in 2011 by former McAfee Inc. executives, CrowdStrike makes software to protect clients from cyberattacks, including predicting and detecting potential hacks. Its clients include Amazon.com Inc. and HSBC Holdings Plc, according to its filings.
CrowdStrike Chief Executive Officer George Kurtz said he expects continued interest in the company partly because of geopolitical events, which will prompt governments and businesses to review their security.
“The stock is going to move.†Kurtz said. “We just need to stay focussed on the long term — protecting our customers from breaches.â€
CYBER RANKING
The IPO is the fourth-largest by a cybersecurity firm, according to data compiled by Bloomberg. The largest was Avast Plc’s 602 million pound ($856 million) listing in London last year. The only other IPOs topping CrowdStrike’s were Gemalto NV’s 515 euro ($631 million) offering in 2004 and a 352 pound listing by Sophos Group Plc in London in 2015.
CrowdStrike’s value approaches that of Symantec Corp. the maker of Norton antivirus software. Symantec, which went public in 1989 in a $16.5 million IPO, is currently valued at $11.86 billion. Some of CrowdStrike’s peers were buoyed by its gains. Carbon Black Inc. climbed as much as 4.4 percent while BlackBerry Ltd., which agreed to buy Cylance Inc. last year, was up as much as 8.1 percent.
Like many in this year’s crop of tech companies going public, CrowdStrike is unprofitable. It reported a net loss of $140 million on revenue of $250 million for the year ended Jan. 31, compared with a net loss of $135 million on revenue of $119 million in the same period a year earlier, its filings with the US Securities and Exchange Commission show.
Uber Technologies Inc.’s $8.1 billion offering is the year’s biggest, followed by smaller ride-hailing rival Lyft Inc.’s $2.34 billion IPO as well as the $2.9 billion listing by Avantor Inc., a chemical maker for the life sciences industry. Other tech-related listings this year have included Pinterest Inc. and Zoom Video Communications Inc. So far the results have been mixed for investors: While Lyft has crashed 19 percent from its offer price, Zoom Video remains the fourth-best performing US IPO of 2019, with its shares up 185 percent.