Enterprise data software company Splunk ended its first day on the stock market with an amazing 108.7 percent bump in price from its $17-per-share IPO.
The San Francisco-based company offers businesses software to better analyze and interpret “big data.” The company’s mission is to “make machine data accessible, usable, and valuable to everyone.” It claims that more than 3,300 customers, including most of the Fortune 100 and various government agencies, use its software. Major Splunk customers include Bank of America, Salesforce, Zynga, LinkedIn, and T-Mobile USA.
PrivCo CEO Sam Hamadeh told us that Splunk had an astounding debut all-around and that it could be a sign of changing market interest in tech.
“The first day close of 108 percent is the highest major tech IPO first day pop since LinkedIn’s over a year ago, and we think it’s justified,” Hamadeh told VentureBeat via e-mail. “IPO investors are moving away from interest in consumer Internet names (Zillow, Pandora, Angie’s List, Groupon, Yelp), most of which are trading below their offering prices (and far below their first day closing prices). In Groupon’s case, investors who bought at the offering price of $20 have now lost 40% in just 5 months.”
Instead of consumer Internet companies, Hamadeh said, the interest for IPOs is now shifting mostly to business technology firms like Splunk.
“The bottom line is tech IPO investors have, for now, moved on from consumer Internet (with the exception of Facebook of course) and now want enterprise software and other business-to-business technology names, including Splunk,” Hamadeh said. “Wall Street underwriters have egg on their faces still from Pandora, Groupon, and Zynga and are returning to their “gatekeeping” role of bring quality companies to market to avoid angering their real clientele: the IPO investors.”
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