CrowdStrike (CRWD) priced its IPO at $34, a 62% premium to the midpoint of the original $19 to $23 range. That is the largest increase since Splunk went public in 2012, and priced 89% above its midpoint. The company raised $612 million at a valuation of $7.7 billion.
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While the other names in the top five have a poor track record post-IPO (only Splunk has outperformed), many others have priced well above the range and soared. The next 10 IPOs with the highest price vs. midpoint include high-flyers like Veeva Systems, Zillow, Wingstop, Zscaler, Juno Therapeutics, and Spark Therapeutics.
Demand was high, as expected. After CrowdStrike priced 62% above its original midpoint, the cloud-based cybersecurity platform popped 70% on its first day, the latest sign of investor appetite for high-growth software providers. Recent IPOs Zoom Video (ZM) and PagerDuty (PD) also trade at nosebleed valuations, up 189% and 130%, respectively, from the offer price.
These are strong companies. They have fast growth and massive market opportunities. But at these levels they also appear to be priced to perfection.
