Signup for our free newsletter:

Don't Be a Victim of IPO Hype

Written By Alexandra Perry

Posted March 10, 2017

Whether or not you invested in Snap, you are probably following its fall.

Snap has entered a downward spiral. Like a drunk girl on prom night, the social media stock arrived brazenly and instantly demanded everyone’s attention.

But a brazen, hyped-up entrance was all it was — not any gauge of long-term stock performance. On Thursday, Snap dropped 12%. It might be back to its IPO price by Monday.

Now, 2017’s second tech IPO is stepping up to the bat. And it is ditching Snap’s hype antics.

Presidio, a provider of information technology services, priced its initial offer Thursday night. The price was lower than expected — $14, with 16.7 million shares.

And despite the lack of hype, Presidio might come out on top.

Presidio is already poised to be a tech unicorn. It competes with the big boys in its field — IBM, Accenture, and Hewlett-Packard Enterprise — and has managed to competitively price its services.

The company focuses on supplying IT to mid-sized companies, which includes developing tech for the cloud and improving digital infrastructure.

Those are phenomenal signs.

The demand for digital infrastructure and cloud technology is going to soar under new corporate tax cuts.

In fact, the International Data Corporation said that total spending on IT infrastructure products will increase by 18.2% in 2017.

This means Presidio’s IPO is timely. It is entering a market where demand for its service is booming.

Now, I am not here to bash Snap. Well, kinda — because it makes it really easy. But when I look at the market, I can’t help comparing these two tech IPOs.

Presidio shows all the trademarks of a unicorn company: competitive pricing, revenue growth, and long-term profitability. And even fears over Presidio’s weaknesses — a saturated market and heavy competition — can be calmed by growth numbers.

Presidio’s growth rate has remained consistent, with a 6.6% growth rate in 2016. Its biggest competitor, IBM, posted a three-year growth rate of -7.4%. Presidio is basically nipping at its heels.

And Presidio’s situation is a lot better than Snapchat’s. Even though Snap won’t admit it, it has to compete with Google and Facebook for its main source of income, ad revenue. And those are some fierce tigers to share your cage with

I am hopeful for Presidio.

When Snap released its IPO, the surge in buying relied on hype — hype the company stirred up on its IPO tour. But Presidio is entering a market that is excited about tech on a quieter, self-assured note.