made a strong debut on Wall Street Thursday, pricing above its anticipated offer range and then opening even higher than that.
All that for a company that remains a long way from profitability.
Riverbed plays in the market for wide-area data services (WADS, although Riverbed prefers the acronym WDS), which includes wide-area file services (WAFS), WAN optimization and application acceleration.
It is the first storage IPO since Xyratex
more than two years ago, an honor that was widely expected to go to the larger (and profitable) CommVault, which may soon follow with its own IPO.
Riverbed raised $85.8 million late Wednesday by selling 8.8 million shares at $9.75 each, above the anticipated range of $7-$8.50. On Thursday, the stock began trading at $14.60, giving those who got in on the IPO an initial gain of 50 percent — and Riverbed a market cap of more than $900 million.
Riverbed lost $10.3 million on sales of $31.8 million in the first six months of this year — but sales were up 500 percent from the first six months of 2005. The company lost $17.4 million on revenues of $22.9 million for all of 2005.
The WADS market has been a hot one, attracting the likes of Cisco, Juniper, HP and Brocade, as companies try to get a handle on far-flung data in remote offices (see Tackling Remote Challenges).