Based in Atlanta, Georgia, Dell’s SecureWorks announced at the start of the week that its IPO may be priced at between $15.50 and $17.50 per shares for its common class A stock.
Dell's Secureworks Valued At $1.42 Billion Ahead Of IPO
Dell's cyber seccurity unit, SecureWork said its IPO is expected to raise up to $157.5 million with SecureWorks Corp expected to be valued at as much as $1.42 billion in this first public offering
In its first quarter, the global IPO market declined to a seven-year low down to $160.6 billion, half of its value last year. The plunge can be attributed to increasing concerns over the global economic slump as investors opt to keep away from the share issue market, according to Reuters’ data.
Jay Jitters, an IPO expert based at the University of Florida said, “From such a low base, the only way to go is up.”
He added, ‘While I don’t expect there to be a flood of IPOS, there will be an increase in the number of companies in several industries that will go public.”
The past few years have seen a number of cyber security firms including Mimecast Ltd, Rapid7 Inc, FireEye Inc among others go public to leverage the increasing interest among investors in these companies.
In spite of the growing investor interest, shares of companies such as FireEye and Rapid7 plunged by up to 80 percent in the initial offering, and are now trading significantly below their IPO share prices. Others such as Mimecast which spiked by 2 percent at the initial offering is also trading way below its offering price.
Ritter indicted that high share prices for cyber security firms should be a red sign given that many of these firms were competing for market share. Such fierce competition would mute their profit growth.
SecureWorks was founded in 1999 and has a client base of up to 4,000 strong spread out in 59 countries. In a statement, the firm said it planned to list its common stock under the symbol SCWX on the Nasdaq.