Cybersecurity Firm CrowdStrike Soars in Wall Street Debut -- 2nd Update
June 12 2019 - 7:19PM
Dow Jones News
By Tomio Geron
Shares in cybersecurity company CrowdStrike Holdings Inc. soared
in their first day of trading Wednesday, closing up 71% from the
IPO price and highlighting continued investor interest in
fast-growing business-software firms.
The results would value the company at roughly $11.6 billion if
underwriters exercise all their options to purchase shares.
CrowdStrike shares closed at $58 on the Nasdaq exchange after
the company late Tuesday priced shares in its initial public
offering at $34 apiece, raising $612 million and surpassing the
expected range of $28 to $30 a share.
Last year, Sunnyvale, Calif.-based CrowdStrike was valued at $3
billion. The company previously had raised about $481 million from
venture investors including Accel, IVP, Warburg Pincus, and
Alphabet Inc.'s CapitalG, according to PitchBook Data Inc. Its
largest pre-IPO shareholders were Warburg Pincus, with 30.2% of
shares, Accel with 20.2% and CapitalG with 11.1%.
CrowdStrike is the largest "pure-play" cybersecurity IPO by
market capitalization on record, according to PitchBook. Other
industry newcomers to Wall Street include Tufin Software
Technologies Ltd. this year, as well as Carbon Black Inc., Zscaler
Inc. and Tenable Holdings Inc. last year, but CrowdStrike dwarfs
them all by market value.
CrowdStrike's arrival on the stock market occurs amid one of the
busiest IPO markets in years, following high-profile venture-backed
tech debuts such as Uber Technologies Inc., Lyft Inc. and Pinterest
Inc.
Although several consumer-tech offerings have struggled on Wall
Street, the stocks of a number of business-software companies --
such as Zoom Video Communications Inc. and PagerDuty Inc. -- have
performed well after their IPOs.
CrowdStrike, led by co-founder and Chief Executive George Kurtz,
provides cloud-based security technology, aiming to do for security
what other companies have done for human resources,
customer-relationship management and other sectors.
Mr. Kurtz compared his company with cloud companies in other
sectors such as Salesforce.com Inc., ServiceNow Inc. and Workday
Inc. "I think people are seeing this seismic shift in technology
from on-premise to the cloud," he said.
The company gained notoriety after revealing that two groups
with ties to Russian intelligence had breached the Democratic
National Committee's technology during the 2016 presidential
campaign.
CrowdStrike said in its prospectus that it generated $249.8
million in total revenue for the 12-month period ended Jan. 31,
more than double the $118.8 million in the year-earlier period. The
company's net loss for that time frame widened slightly to $140.1
million from $135.5 million.
Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of
America Corp. and Barclays PLC are among the underwriters of the
CrowdStrike offering.
--Alexander Davis contributed to this article.
Write to Tomio Geron at tomio.geron@wsj.com
(END) Dow Jones Newswires
June 12, 2019 19:04 ET (23:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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