IPO Snapshot: What’s Too High And What’s Too Low

There’s been a handful startups that have gone public in the last couple weeks with varying results. SmileDirectClub, Cloudflare, Datadog, and Ping Identity all made their debuts on the public market, and we’ve been here watching it all happen.

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Let’s dive in and see where they’re at.

Most recently, Datadog and Ping went public this week. Pricing above and at the midpoint of their respective ranges, they both saw their stocks surge on their first day of trading.

New York-based Datadog started trading on the public markets on Thursday after setting its price at $27 per share on Wednesday. The company’s stock opened at $40.35, nearly 50 percent higher than the price it set. Datadog’s stock closed at $37.55 on its first day of trading.

Denver’s Ping Identity closed its first day of trading Thursday at $20.11 after pricing on Wednesday at $15 per share. Its stock opened at $18.75, 25 percent higher than where it priced.

At first blush, this is the ideal outcome for tech companies and their private market counterparts. The public market has, at least for now, proven to have an exceptional appetite for companies that are growing fast. Yet the significant pops over also signal that quite a bit of money has been left on the table. But the alternative, which is pricing too high, certainly comes with a touch more embarrassment, as SmileDirectClub has found out.

The Nashville-based DIY teeth straightening company priced its shares at $23 apiece before it started trading publicly last week. Its stock closed 28 percent below its price on its first day of trading and still hasn’t hit the $23 per share price the company thought it was worth. SmileDirectClub’s stock closed at $18.64 per share on Thursday.

Cloudflare’s had a pretty good near-week on the public markets so far. The company priced its shares at $15 apiece and opened at $18 per share on its first day of trading last week. Cloudflare’s stock was trading at $18.75 at the close of markets on Thursday.

We’ll continue to track late-stage companies’ IPOs as they come (Peloton next week!)

Illustration Credit: Li-Anne Dias