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Wall Street Welcomes Cloudera's IPO

Written by Monica Savaglia
Posted May 5, 2017

Investors can’t get enough of tech IPOs but for a fair reason!

I’m sure you’re well aware that our society lives and breathes technology — fascinated by where technology is headed and how it can possibly solve all our problems and inconveniences. This leaves us starving for new information about companies and their technologies.

In addition to that, we’ve been seeing a strong comeback from the IPO market. In the past few months, it's been revitalized and because of its newfound strength, private companies are feeling confident in going public.

Cloudera (NYSE: CLDR), a software company, had its IPO this past Friday. It was a very successful first day of trading for Cloudera.

The company priced its shares at $15 the day before going public, opened up on Friday with $17.87, and continued to see a burst — closing the day out with $18.10, a 20% increase from its IPO price in just one day of trading.

I mentioned earlier that Cloudera is a software company, but you’re probably wondering what that really means or at least, what kind of software company it is...

The company provides Apache Hadoop-based software, support and services, and training to business customers. And customers use this software to analyze large amounts of data across thousands of servers.

Cloudera was founded in 2008 and is headquartered in Palo Alto, CA. It all started with three engineers from Google, Yahoo, and Facebook along with a former Oracle executive.

The company’s software continues to gain popularity with companies that have huge amounts of digital information in their corporate servers. Cloudera’s software makes it easy to organize and analyze data. Basically, the ideal platform for maintaining a lot... and I mean a lot... of data.

For the fiscal year that ended on January 31, 2017, Cloudera earned $261 million in revenue, which was a $166 million increase from the previous year. Most of its revenue comes from its subscription service platform where customers have the option of signing up for a one- to three-year time frame.

The company put 15 million shares up for sale and by the end of the day, it had a $2.3 billion valuation.

In 2014, Intel (NASDAQ: INTC) invested $742 million in Cloudera, purchasing shares for double of what Cloudera ended up pricing its IPO at. This may seem like Intel got the short end of the deal, but that's not the case at all. Intel was purchasing a decent chunk of the company. Not only that, but Intel knew the price would be worth it and benefit its own business in the long run.

Cloudera’s CEO, Tom Reilly, has this to say about Intel’s 2014 purchase: “Intel’s investment wasn’t driven around financials as much as a strategic partnership.”

Intel came out of the 2014 deal owning 22% of Cloudera and as shareholders, it gave them the opportunity to have first-hand access to any information on any possible acquisitions by another company. Intel heavily dominates the data center services market and a partnership with Cloudera would ensure its hold on the market.

The future of Cloudera looks very promising. The company is investing in tech markets that are growing fast. CEO Tom Reilly said on Friday that Cloudera has invested heavily in machine-learning tools that are being used for everything from genomic research to finding cancer cures to counterterrorism intelligence and anti-money laundering.

Now, it’s nearly a week after Cloudera’s IPO, and it closed this Thursday at $19.45.

IPO Details:

  • Symbol: CLDR
  • Exchange: NYSE
  • IPO Date: April 28, 2017
  • Industry: Tech, Prepackaged Software
  • Underwriters: Morgan Stanley, JPMorgan, Allen & Company
  • Market Cap: $1,664.8 million
  • Net Income: $-187.3 million (past 12 months)
  • Revenues: $261 million (past 12 months)
  • Shares Being Offered: 15 million
  • IPO Price: $15
  • Prospectus

Until next time,

Monica Savaglia
Wealth Daily

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