Not one, not two, but three big enterprise tech companies — Hortonworks, New Relic, and Workiva — went public today. And the good news reaches beyond those three.
Companies they compete with that are preparing for initial public offerings — think Cloudera, MapR, AppDynamics — are picking up some extra fuel.
“Looks good for them,” John Fitzgibbon, Jr., the man behind research firm IPOScoop.com, told VentureBeat in an interview.
Not only did Hortonworks and New Relic experience pops once they started trading on the Nasdaq and the New York Stock Exchange (NYSE), respectively, but they also closed higher than they started — New Relic at $33.82, up from $30.16, and Hortonworks at $26.38, up from $24. Workiva didn’t get a pop, but at least it didn’t endure a woeful slump in its debut on the NYSE, closing at $13.76, just under the $14 opening price this morning.
So the takeaway today — a day when the market as a whole didn’t do so well, with Nasdaq closing down 1.16 percent — might be to watch out for more IPOs of next-big-thing software.
“Of the seven IPOs that opened for trading today, investors favored the high-growth software companies,” Kathleen Smith, principal at IPO exchange-traded funds (ETF) manager Renaissance Capital, wrote to VentureBeat in an email. “The strong performance of New Relic and Hortonworks showed that investors were willing to pay a premium for the stocks of unique high-growth companies, which stand out in a stock market fearful that declining energy prices may mean slowing global growth.”
Fitzgibbon was less inclined to generalize.
“It all depends on what sectors they’re coming from,” he said of the technology industry. “It’s a broad, broad area out there.”
For instance, Workiva didn’t take off today.
“It just had trouble gathering momentum,” Fitzgibbon said.
But New Relic, he said, “was hot from the get-go.” He pointed to the increased price range for the IPO and the opening price, which came in above the revised range.
And the success of Hortonworks — which sells a distribution of the Hadoop open-source software for storing, processing, and analyzing lots of different kinds of data — suggests that investors are hungry for more Hadoop: “I understand that that is in play,” Fitzgibbon said.