Rubrik, who valued his shares on Wednesday at $32, saw them climb up to $40 Thursday, the stock’s first full day of trading. The stock closed at $37, still a gain of nearly 16%.
The Microsoft-backed tech company was initially looking for a price range between $28 and $31, according to its S-1 filing with the Securities and Exchange Commission. The public offering, oversubscribed 20 times, caused the company’s value to soar. at approximately $5.6 billion.
Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, said Rubrik’s initial gains seemed a bit modest compared to other popular tech stocks, largely because of interest institutional. Additionally, he said, according to his own research, it’s a trend he’s noticed among companies with at least $100 million in revenue.
“This is a company that is primarily of interest to institutional investors,” Ritter said. Fortune. “It doesn’t have a big reputation like Reddit. So basically, it’s the institutional investors who set the price here, and the institutional investors succeed on average.
Rubrik reported annual revenue of $784 million last year. However, the company is not yet profitable, reporting a net loss of $97.5 million for the quarter ending January 31. A year earlier, that figure was $86 million.
“This shows that the market is willing to buy technology companies that are losing money but are growing and have significant future profit potential,” Ritter added.
Rubrik’s IPO is the latest in a series of tech sector IPOs that have helped reinvigorate public markets. Last week, Walmart-backed Ibotta was able to raise $577 million when it set an offering price above the $88 range, its shares then jumped 17%. In March, after its own IPOs, social media company Reddit saw its shares win 48% and those of chip company Astera Labs soared 72%.
