Trading Floors Prove to be Icing For Okta Inc.’s IPO Cake
The much anticipated April 7th offering for Okta Incorporated proved to be as successful as expected. The company managed to raise $187 million from the sale of 11 million shares at the top of their increased share price range of $5 – $17 per unit of common stock. However, this was only a preliminary success as to the progress the company would achieve in going public. Further gains were to be made as the firm’s stock traded in the New York Securities Exchange.
On its first day of trading floors, the stock surged from its issuance price. This came as a result of the company being well-accepted by investors across the board. As such, there are high expectations for the firm’s success and this translated to increases in share value. The stock rose by as much as 44 percent, selling at $24.50 over a period of the day before finally settling at an overall growth of 38 percent. The company follows other tech firms that have gone public and had huge rises in value on first-day trading. Previous corporations to have had similar experiences in the market include MuleSoft and Snap Inc. which both went public in the first quarter of the 2017 financial year.
Just like its counterparts, Okta is still in debt and as such has not been able to break even. In the fiscal year that ended January 31st, 2017, the company recorded losses totaling to $83.5 million. However, the revenue it generated over this period rose by 87 percent, almost doubling its working capital in the process. As a result of the share price increase, the firm’s value has been estimated to be over $2 billion. This figure translates to a nearly 100 percent rise from its previous valuation, signaling strong company growth.
For major investors in the firm, this means higher returns that could even possibly double as the year goes on. Venture capitalists who have invested in Okta Inc. include Andreessen Horowitz, Greylock Partners, Khosla Ventures, Floodgate and Sequoia.
In a statement to the press, co-founder of the venture Todd McKinnon said that the offering had been planned for an extended period as opposed to the assumption that most tech firms were suddenly filing to go public in the wake of better market environments at the time. According to him, the final decision to push on with the offering was made more than seven months ago, meaning that plans were underway before the last quarter of 2016.
Their first plan to go public, however, dated more than two years ago when the firm sought financial support from private investors by holding a Series E funding round. At the time, the company was valued at just under $600 million. After the process, the firm had planned for a late 2015 IPO. However, its issuance had ended up being late in its arrangements. The instability of the markets all through 2016 prevented the enterprise from having its release last year.
As such, persistence and the right timing have led to the success of this company’s offering and performance in the stock exchange. Further, its will to compromise with bigger clients means it serves and retains a wider customer base.