CrowdStrike (CRWD) priced its IPO at $34, a 62% premium to the midpoint of the original $19 to $23 range. That is the largest increase since Splunk went public in 2012, and priced 89% above its midpoint. The company raised $612 million at a valuation of $7.7 billion.
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While the other names in the top five have a poor track record post-IPO (only Splunk has outperformed), many others have priced well above the range and soared. The next 10 IPOs with the highest price vs. midpoint include high-flyers like Veeva Systems, Zillow, Wingstop, Zscaler, Juno Therapeutics, and Spark Therapeutics.
Demand was high, as expected. After CrowdStrike priced 62% above its original midpoint, the cloud-based cybersecurity platform popped 70% on its first day, the latest sign of investor appetite for high-growth software providers. Recent IPOs Zoom Video (ZM) and PagerDuty (PD) also trade at nosebleed valuations, up 189% and 130%, respectively, from the offer price.
These are strong companies. They have fast growth and massive market opportunities. But at these levels they also appear to be priced to perfection.
The article CrowdStrike priced its IPO 62% above the midpoint, the highest in 7 years originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.
Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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