IPO Scorecard: CrowdStrike Gains 70 Percent on First Trading Day

Cybersecurity firm CrowdStrike delivered the kind of market debut this week that was an unfulfilled dream for the much-anticipated IPOs of Uber and Lyft earlier this year.

Sunnyvale, CA-based CrowdStrike (NASDAQ: CRWD) priced 18 million shares of common stock at $34 on Tuesday. Trading began at $63.50 Wednesday, and reached a near-doubling of the company’s IPO price before settling down to close at $58 for a first-day bump of more than 70 percent.

That close pegged CrowdStrike’s market capitalization at $11.4 billion—more than three times its valuation of about $3 billion at the time of its last fundraising in June last year.

CrowdStrike pulled off its showy launch as a publicly traded company despite facing a much thicker pack of competitors than the two dominant ride-hailing companies do. Founded in 2011, CrowdStrike offers cloud-based security that extends from the data center out to the endpoints of an enterprise network—laptops, smartphones, and other devices. The company’s rivals include security giants McAfee and Symantec, fellow endpoint security firms Cylance and Carbon Black, and network security companies Palo Alto Networks and FireEye.

As a private company, CrowdStrike had raised a total of $481 million from investors including Accel, March Capital Partners, General Atlantic, Institutional Venture Partners (IVP), and Capital G, the venture fund of Google parent company Alphabet, according to Crunchbase.

Despite rewarding early investors with its striking public debut, CrowdStrike can’t bank on sustaining its elevated share price. Competitor Carbon Black (NASDAQ: CBLK) rejoiced in a healthy first-day bump when it went public in May last year, gaining 26 percent over its $19 IPO price. But its share value has subsided over the past year, closing at $15.96 on Wednesday.

CrowdStrike has increased its revenue each year since 2017, while taking losses as it invested in growth. The company reported revenue of nearly $250 million for its 2019 fiscal year, which ended Jan. 31. Its net loss was $140.1 million for that year.

Meanwhile, Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) shares continue to trade below their IPO prices.

Photo credit: Dmitry Sunagatov, Depositphotos

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