SailPoint’s IPO on Thursday was a disappointment for anyone hoping to show that Tech IPO is getting hot again.
The first day trading fell below the initial price of $23. The stock had a slightly better Friday, closing on over $24. But that’s not close to the hopes of Big Bang companies and VCS.
For example, ServiceTitan, the last technology IPO in December, was a huge success. The stock price rose from $71 to $105 on the first day and is currently trading at around $100.
The success of back-to-back would have served as a signal that the painful, trapped IPO window was finally open.
Instead, retail investors are using discernment rather than wild enthusiasm.
IPO expert Nick Einhorn, who is Vice President of Research at Renaissance Capital, said “I’m hesitant to draw too many conclusions about the appetite of high-tech or software IPOs,” TechCrunch said. “The company is growing well, but in the cybersecurity situation it may not have stood out enough to be awarded a premium sale double.”
Renaissance Capital is an IPO market research company that also provides funds (ETFs) traded on IPO exchanges.
SailPoint was a bit strange IPO as it wasn’t a startup. Previously, PE company Thoma Bravo went private in 2022 and was a public company until it was valued at $6.9 billion at the time. The private equity giant remains the majority owner.
This was not a startup backed by classic ventures, but a leveraged buyout company as an IPO. As with ServiceTitan, VC-backed startups often have growth potential that excite investors.
On the positive side of Sailpoint, the company priced the first 60 million shares at $23. According to regulatory filings, Sailpoint runs for over $1.3 billion, will be used for business and to repay approximately $1.5 billion in debt in books. It also has a market capitalization of around $13 billion, driven by what Thoma Bravo paid for.
“We didn’t consider this a disappointing IPO. We went from midpoint of $20 on the second day to the end of $25. In our minds, it was a very successful IPO. “That’s what I mean,” CEO Mark McClain told TechCrunch.
Still, results for those looking for signs that the IPO could flow again soon (particularly, late startup employees considering paper money stocks and stock options): Signals remain vague is.