Shares of Palo Alto soar 36 percent in NYSE debut
Shares of Palo Alto Networks Inc soared nearly 36 percent in their market debut on Friday, as investors bet on growth of the enterprise software market.
The Santa Clara, California-based company, which makes security software for businesses, traded on the New York Stock Exchange at $56.98 after shares priced at $42, above their expected range.
Palo Alto's 6.2 million shares priced on Thursday night, raising $260.4 million.
Earlier this week, Palo Alto upped its price range to $38 to $40 from a range of $34 to $37.
Palo Alto's IPO comes on the heels of a successful offering from IT management services provider ServiceNow Inc last month. ServiceNow's public debut helped open an IPO market that was effectively frozen for a month following Facebook Inc's botched offering.
Besides Palo Alto, other IPOs that priced this week include online travel company Kayak Software Corp, teen retailer Five Below Inc and pharmaceutical company Durata Theraputics Inc. The offerings raised a total of $606.9 million. Guitar maker Fender Musical Instruments Corp pulled its IPO Thursday night, citing market conditions.
In fiscal year 2011, Palo Alto's revenue more than doubled to $118.6 million. The company reported a net loss of $12.5 million, down from $21.1 million a year earlier.
Palo Alto offered 4.7 million shares during the IPO, while existing shareholders offered 1.5 million. The company's backers include Greylock Partners, Sequoia Capital and Globespan Capital Partners.
Morgan Stanley, Goldman Sachs and Citigroup are the lead underwriters on the offering.