by Alex Williams
Wi-Fi equipment maker Ruckus Wireless (NYSE:RKUS) held an initial public offering on the New York Stock Exchange this morning at a share price of $15. It raised $126 million. While it was a nice move for the company, as well as its venture capital investors (Sequoia Capital, Sutter Hill Ventures and others had provided some $54 million in funding for the eight-year-old company), its reception on the stock market on its first day of trading was lackluster.
The stock fell about 8 percent in its debut as investors felt the wireless service provider was a bit expensive, considering the lackluster IPO market. Ruckus offered 8.4 million shares in the offering.
According to Reuters, Chief Executive Selina Lo shrugged off the share movement. In her view, the market may be weak but it is still strong for wireless services. She said that Cisco recently reported that its service-provider’s Wi-Fi business grew almost 100 percent year-over-year.
It has been a tough week in the public markets, especially considering the unknown about what actions the U.S. Congress will take as the “fiscal cliff,” approaches. The uncertainty has led to a tepid IPO market and Ruckus may well be feeling the results. Ruckus had planned to make its debut a week earlier but Hurricane Sandy forced a delay which put it square in the middle of the current market turbulence.
Reuters reports that Ruckus posted $6.1 million in net profits with revenues of $94 million for the six months ending June 30. The company competes with Ericsson, Cisco and smaller service providers such as Meru Networks and Aruba Networks.