Atlassian shares surge on Nasdaq debut
We’ll send you a myFT Daily Digest email rounding up the latest Facebook Inc news every morning.
Australian software company Atlassian soared on its debut on Thursday, emerging as a bright spot in an otherwise gloomy IPO market this year.
The company’s stock jumped as much as a third to $28, giving it a market capitalisation of nearly $6bn. The first-day rally came even after Atlassian priced its shares above expectations.
The 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.
Most companies have instead 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.
That was above the indicated range of $19 to $20, which the company already had lifted earlier this week from a range of $16.50 to $18.50. It also increased the number of shares on sale by 10 per cent.
Matthew Kennedy, an analyst at Renaissance Capital, attributed Atlassian’s success to the particular strengths of the company, which sells enterprise software including a messaging service, project management tools and a document-sharing service.
“It is the type of tech company that can go public in any market,” Mr Kennedy said. “The combination of growth and profitability make it a standout IPO.”
Atlassian contrasts with other tech companies such as Square, the payments start-up headed by Jack Dorsey that went public earlier this year.
Square had earned a high valuation in its last fundraising round as a private company, and attracted a negative reaction when it was forced to price its stock at a substantial discount and issue more shares to compensate its private investors.
Atlassian, by comparison, has never raised money from outside equity investors; its venture-capital backers bought shares from employees. The company also has an extended history of profits from its business of selling collaboration tools, with software developers as a core market.
Goldman Sachs and Morgan Stanley were lead underwriters.
Get alerts on when a new story is published