Data Center IPOs of 2007
Was last week’s blockbuster IPO by VMWare a special case? Or are the turbulent financial markets still welcoming for technology IPOs? As the leading player in a hot technology niche, VMWare (VMW) was bound to attract strong investor interest. Even the timing of its debut couldn’t subdue that enthusiasm. As the markets fluctuated wildy on the latest news and rumors about the subprime mortgage market, VMWare nonetheless had a first-day gain of 75 percent, closing at $51 a share, up $22 from its $29 IPO pricing. That followed strong initial offerings for Limelight Networks (LLNW) and BladeLogic (BLOG).
But have these shares been able to sustain their gains through the recent market volatility? Here’s a quick look at how 2007′s data center IPOs have fared since going public:
While BladeLogic has retained its gains, Switch & Data (SDXC) is now trading below its IPO price, despite the fact that it beat the Street’s second-quarter earnings expectations and raised its guidance last week. Limelight shares have dropped sharply in recent weeks, as the company lowered its revenue guidance. Among broader indices, the Dow Jones Industrial Average has gained approximately 5.3% for the year thus far.
There’s at least one more potential IPO for the data center sector this year, as DuPont Fabros Technology (DFT) has filed for an IPO as a real estate investment trust, in which it hopes to raise up to $700 million. If it succeeds, it will become the second REIT focused on the data center sector, joining Digital Realty Trust (DLR).