Australian software company Atlassian soared on its debut on Wall Street overnight, jumping by nearly a third on the day to be one of the most successful floats this year.
The company’s stock jumped as much as a third to $US28, giving it a market capitalisation of nearly $6 billion, before easing a touch to close at $US27.28, up 32.3% and worth $US5.8 billion ($A7.3 billon).
The first-day surge came as Wall Street enjoyed its best day this week as the sell off in commodities died and calmer conditions prevailed. To make the performance by Atlassian even better, the surge came after it lifted its issue price above expectations.
Atlassian, which has net giants, Facebook and Netflix, plus Nasa among its customers base, priced 22 million shares at $US21 a piece late on Wednesday, raising $US462 million.
That was well above the indicated range of $1US9 to $US20, which the company already boosted earlier in the week from a range of $US16.50 to $US18.50. It also increased the number of shares on sale by 10%.
Many investors would have taken that as a negative and greedy by the promoters of the float, but Wall Street ignored that and chased the shares hard all day.
The Financial Times pointed out that Atlassian’s offering “follows what has been a tough year for US-listed IPOs, including technology share issues, as market volatility has stymied investors and hot tech start-ups have been drawn to lofty valuations on offer in private funding transactions."
"Atlassian was the first US tech IPO to price above the range since July, according to Renaissance Capital, before global stock markets fell amid concerns about the health of China’s economy and the potential ripple effects of a slowdown across the globe.
The FT pointed out that most floats this year, and especially since mid year have "had to offer discounts to lure investors wary of declines in the after-market. On average, investors have lost 3.6 per cent buying US IPOs in 2015 and 1.4 per cent buying into tech companies.”
