Palo Alto-based Cloudera saw its shares spike nearly 20 percent in its first day trading Friday morning, making the startup the latest in a string of local enterprise software IPOs to enjoy healthy day-one pops.
Cloudera, which provides an open source data analysis platform to other companies, opened the day trading at $17.87.
The startup raised $225 million Thursday, offering 15 million shares at $15 — above the $12-$14 range the company had targeted earlier this month. That number may continue to grow, as Cloudera gave the underwriters an option to buy another 2.25 million shares within 30 days.
But Friday’s $17.87 price tag is a significant discount from the nearly $31 per-share price Intel paid for Cloudera stock in 2014. That sharp drop could give pause to investors, analysts and other startups eyeing the public market — all of whom have been hoping that a series of recent initial public offerings from enterprise software companies signalled that the IPO market is on the rebound after a sluggish 2016.
Cloudera follows San Francisco-based cloud startups Okta and Mulesoft into the public market, both of which saw healthy first-day pops when they started trading this year.
Like many tech startups going public, Cloudera is not profitable, and has warned investors it may never turn a profit. The company brought in $261 million in revenue in the fiscal year ending Jan. 31, up 57 percent from $166 million the year before, according to documents the company filed with the Securities and Exchange Commission in preparation for its IPO. The company’s net losses were $187.3 million last fiscal year, and $203.1 million the year before.
Intel is one of Cloudera’s major investors and partners, pouring $766.5 million into the company as of January 31. After the IPO, Intel was expected to control more than 19 percent of Cloudera’s stock. Cloudera also has optimized its software for use with Intel processors.
That deeply involved relationship could raise concerns down the road, Cloudera wrote in its SEC filing.
“Intel could have considerable influence over matters such as approving a potential acquisition of us,” the company wrote. “Intel’s investment in and position in our company could also discourage others from pursuing any potential acquisition of us, which could have the effect of depriving the holders of our common stock of the opportunity to sell their shares at a premium over the prevailing market price.”
Cloudera is trading on the New York Stock Exchange under the ticker symbol CLDR.
The company shared the spotlight Friday with Arizona-based online used car seller Carvana, which also raised $225 million in its IPO Thursday, and had the honor of ringing the opening bell at the New York Stock Exchange on Friday morning.