The New York Stock Exchange welcomes DigitalOcean, Inc. (NYSE: DOCN), today Wednesday, March 24, 2021, in celebration of its initial public offering. To honor the occasion, CEO Yancey Spruill, accompanied by John Tuttle, vice president and commercial director of NYSE, plays at The Opening Bell®.
NYSE
Small-scale cloud infrastructure provider DigitalOcean debuted on the New York Stock Exchange on Wednesday under the symbol “DOCN”.
The shares began trading at $ 41.50 per share, approximately 12% below the $ 47 price at which it sold shares in its initial public offering and below the $ 44-47 range per share that the company had provided in updates to its IPO brochure. At its opening price, it has a market capitalization of $ 4.37 million.
Shares fell about 5.5% Wednesday afternoon.
DigitalOcean challenges much larger companies, including Amazon and Microsoft, in the marketplace by providing computing and storage resources that companies can consume to run their software, rather than operating their own data center infrastructure. DigitalOcean has created a business by making its products easy to use. Most of their income comes from the use of drops, which are virtual parts of physical servers.
“We offer all customers, regardless of size, a personalized support experience, so we think that making it easy and simple and giving help to our customers when they need it is the way to win the heart every day. and the minds of our developers and entrepreneurs, ”CEO Yancey Spruill told CNBC’s“ Squawk Alley ”. He said the market is large, with more than $ 100 billion in annual cloud spending for small and medium-sized businesses.
DigitalOcean raised $ 775 million on the IPO. The company operates 14 of its own data centers in the United States and abroad through leases, and the company intends to continue to expand its footprint, as will its competitors. But unlike its big rivals, DigitalOcean doesn’t have the billions of dollars customers have agreed to pay for services they haven’t used yet. The company had deferred revenue of less than $ 5 million by the end of 2020.
In 2020, DigitalOcean recorded a net loss of $ 43.6 million for a total of $ 318.4 million in revenue. The loss increased by 7% compared to 2019 and revenue grew by approximately 25%. In a presentation to potential investors, Chief Financial Officer Bill Sorenson said the company wants to increase the amount of money it gets from each client while reducing research and development and overall administrative costs as a percentage of revenue.
At its $ 47 IPO, DigitalOcean was valued at a multiple of 16 sales based on 2020 revenue, compared to 12 for Microsoft.
– CNBC’s Ari Levy contributed to this report.
I WILL SEE: Byron Deeter of Bessemer on the resurgence of cloud computing stocks