Data company Pure Storage is expected to go public Wednesday amid lingering skepticism about the IPO market for tech enterprises, and investors will be watching closely.
Smith added that a positive IPO from Pure could also pave the way for more “unicorns” – privately held companies with a value of at least $1 billion – to go public.
To be sure, Pure Storage’s investors hoped they would have done better by now. Mutual funds and hedge funds alike posted widespread losses in the third quarter. But for new investors in the IPO, it isn’t such a big deal, as long as the new shares rise in trading.
“I take a gander at the open door, the amount it’s changing the market, the company’s span, how it’s changing the storage space”, said David Rudow, a senior equity expert at Thrivent Asset Management, who was considering buying into the offering early Tuesday. Performance Food Group Co PFGC.N, surgical center operator Surgery Partners Inc SGRY.O and biotechnology companies Edge Therapeutics Inc EDGE.O, Mirna Therapeutics Inc MIRN.O and Novocure Ltd NVCR.O all priced their IPOs last week at steep discounts to their indicated range. Pure Storage’s market debut will show the public market’s appetite for risky but industry-leading tech companies in the months to come. “If execution is poor, we will see more companies continue to tap the private markets over the next six months instead of risking a public offering in a soft market environment”. How a company like Pure Storage fares in its IPO could affect their financing plans, a few investors say.
Pure Storage is a memory storage company that offers flash memory, rather than disk memory or a combination of flash and disk. While its income is developing, its costs, especially for deals and marketing, are likewise high, as indicated by portfolio directors looking at the company and the company’s administrative filings. The company said in a regulatory filing that it hasn’t achieved profitability for any fiscal year since its inception in 2009.