Dell’s SecureWorks stumbles in first tech IPO of the year

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Source:   —  April 23, 2016, at 0:37 AM

Up until today’s SecureWorks offering, there had been zero in the U. S. in two thousand-sixteenth. Zero. This compares to seven in the same period latest year and twenty-four in that timeframe the year before.

Dell’s SecureWorks stumbles in first tech IPO of the year

It's been a dry year for tech IPOs. Up until today’s SecureWorks offering, there had been zero in the U. S. in two thousand-sixteenth. Zero. This compares to seven in the same period latest year and twenty-four in that timeframe the year before.

So tech investors and late-stage private companies were watching SecureWorks closely, to look if the tech IPO window would reopen. It's one of the few indications we've right presently to evaluate public investor appetite for tech IPOs. Unfortunately, SecureWorks faltered.

The unicorn-sized security company split from Dell, although the computer manufacturer remains its majority owner. SecureWorks raised $112 million in the offering, after pricing its IPO at $14 per share. But the company was expecting the initial price to be between $15.50-$17.50.

TechCrunch spoke to CEO Mike Cote about why they went public right presently and why he's optimistic that SecureWorks will do well as a public company.

Cote told TechCrunch that the IPO has nothing to do with Dell’s acquisition of EMC. He said that the process had begun before that and that the move will authorize SecureWorks to “go back to our entrepreneurial roots and speed up the changes we can create and our growth.”

Cote says the company, which has huge corporate clients including Bank of America, is in a position to succeed in what's a very competitive landscape, with countless security businesses. Cote says they're focused on emerging categories such as the Internet of Things and that SecureWorks will assess threats and “create the appropriate actions to assistance prevent or detect them and allow actionable intelligence and dynamic context.”

Atlanta-based SecureWorks was acquired by Dell for more than $600 million in two thousand-eleventh, but its current market cap is twice that. Yet while the company has seen an acceleration in income growth, its costs have grown, leading to widening losses.

Cote maintains that recurring subscriber income will assistance them excel as a public company. “The business is very predictable,” he says. “Michael Dell gave us the opportunity to invest ahead of our growth. We’re able to deal with the growth and the things that may be coming down the pipe.”

Yet SecureWorks closed the day at $13.88, beneath the $14 IPO price. The offering certainly didn't assuage concerns about the current environment for tech IPOs.

Featured Image: bfishadow/Flickr BELOW A CC BY 2.0 LICENSE

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