By Brenon Daly
Although the US equity market has been a bit choppy over the past week or so, shares are still generally inching higher. Sure, it hasn’t necessarily been the uninterrupted ascent of the Nasdaq that we saw in the first quarter, which recorded the strongest start to a year in two decades. But the sentiment – despite renewed concerns about the economies of Europe as well as the quality of some Q1 results, which will begin trickling in over the coming weeks – has been bullish. That goes double for the newest entrants into the equity markets, IPOs.
We have already highlighted the warm reception that Wall Street has given the companies that have come to market so far this year. We expect that to continue next week, which is shaping up to the busiest week in tech underwriting in a long time. Splunk, Infoblox and Proofpoint are all scheduled to price their offerings next week. (The trio set preliminary ranges earlier this week. A fourth tech company, Envivio, also set its range this week but will likely be heading out later in the month.) Of the IPOs on the calendar, Splunk is all but certain to capture a disproportionate amount of attention as it steps onto Wall Street.
Splunk, which plans to trade under the ticker SPLK on the Nasdaq, will almost certainly be valued at more than $1bn on its debut. (This week, it set the range for its 13.5 million shares at $8-10 each, although we suspect that the actual price will be north of that range.) Splunk finished its most recent fiscal year (ending January 31) with $121m in sales, an 83% increase over the previous year. The growth rate for the second half of the year actually accelerated at the company, so it will hit the market with a lot of momentum. (And with four bulge-bracket bookrunners, Splunk’s performance will be trumpeted loudly across Wall Street.)
We’ll have an in-depth look at Splunk and next week’s other two IPO candidates in tonight’s Daily 451. Additionally, the report will look ahead to what’s coming in the pipeline after this trio hits the market. If anything, the second round of IPOs this year will be even hotter than this current round. Look for the special IPO report tonight.