San Jose, CA-based Nutanix Inc started trading at the Nasdaq stock exchange on Sep 30 under the symbol “NTNX”. The enterprise cloud platform provider finally raised almost $238 million by selling 14.87 million shares at a price of $16.00 per share. (Read More: Nutanix's NASDAQ Debut Set on Sep 30, to Raise $241.5M)
The final Initial Public Offering (IPO) price was higher than the earlier given price range of $13-$15 per share, which was a raise from the original range of $11-$13 per share. At the close, Nutanix’s shares surged 131.3% ($21.00) to $37.00.
According to The New York Times the IPO valued Nutanix at “$2.18 billion- slightly higher than the one it received in the private markets two and a half years ago.” Post the surge in share price, Nutanix is now worth almost $5.08 billion.
Nutanix’s enterprise cloud platform “converges traditional silos of server, virtualization and storage into one integrated solution and can also connect to public cloud services.” The company’s offerings include two software products Acropolis and Prism, which are delivered on x86 servers.
Per MarketWatch, Nutanix had 3,768 end customers as of Jul 31, 2016, which includes the likes of Activision Blizzard (ATVI - Analyst Report) and Nintendo (NTDOY - Snapshot Report) , both Zacks Rank #2 (Buy) stocks. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
However, intensifying competition is a key concern. Dell’s majority control over VMware (VMW - Analyst Report) , a Zacks Rank #3 (Hold) stock, post the EMC acquisition is a major headwind for Nutanix. If Dell chooses to use VMware products instead of Nutanix, the company’s top-line growth will suffer, which will definitely impact stock price.
Best IPO of the Year
Per Financial Times, Nutanix has recorded “the biggest opening day bounce for a US listing this year”, surpassing Twilio (TWLO - Snapshot Report) , a Zacks Rank #3 stock. According to Dealogic, Nutanix was the third-biggest technology IPO in the U.S. to-date in 2016. Nutanix’s price surge has surely brought some cheer in an otherwise gloomy IPO market in 2016, which has been the weakest since 2009.
Per data available from the Renaissance Capital, year-to-date IPO pricing activity was down 46% to 75, while total proceeds raised were down 47.3% to $12.3 billion. Notably, only 101 companies have filed their IPOs in the first nine months of 2016, as compared with 234 in the same period in 2015. September was the busiest month with 18 IPO filings.
Moreover, the forecast for the fourth quarter is not encouraging due to the U.S. presidential election in November. However, market observers believe that strong showing from Nutanix bodes well for technology companies set to debut in early 2017.
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