Australian software company Atlassian soars 32% on US$5.8bn Nasdaq float
Stock in the Australian software company Atlassian soared 32% after listing on the Nasdaq stock market overnight.
Hitting the boards on Thursday in New York under the code name TEAM, the stock debuted at US$27.67 (A$38.10), up from the US$S21 premium investors paid during the company’s initial public offering (IPO).
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It reached a peak of US$28.50 before settling to trade strongly around $US27 throughout the session, eventually closing at US$27.78, up 32%.
Atlassian’s listing on the Nasdaq is the biggest float from an Australian company on US markets and closed out the day with a market value of US$5.8bn, well above its last private valuation of US$3.3bn last year.
The performance shone some light on a bleak stretch for IPOs, on pace to have their worst year in terms of dollars raised since 2009, the IPO fund manager, Renaissance Capital, said. First-day returns from IPOs this year are in negative territory.
“It’s always hard to anticipate the enthusiasm in the market,” said Jay Simons, Atlassian president and head of the company’s San Francisco office. “There is a very small percentage of IPOs even in the last couple of years that have moved their price range up and then priced above the range.”
Atlassian’s IPO raised US$462m after pricing just above the expected range of US$19 to US$20. It is the sixth-most highly valued IPO of the year.
Atlassian, which has been profitable for the past 10 years, has not raised venture capital funding to support its operations. For the last fiscal year, it posted profit of $US6.78m.
However, the company said its profit, which shrank by about two-thirds from 2014, may continue to slide as it spends more on developing technology.
That could pose a problem, said James Gellert, chief executive of Rapid Ratings, which assesses the financial health of companies. Over the past several months Atlassian has rushed potentially lower quality products to market.
“If they lose the confidence of the development community they could see … a serious sales problem,” Gellert said.