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The storage startup priced shares at $9 Thursday night, in the middle of the price range. However the stock opened around $7.50, some 17% percent lower than the IPO price. In mid-day trading it recently changed hands at $7.62, 15% below the IPO pricing.
The Mountain View, Calif.-based company sold 18 million shares for $9 apiece, raising $162 million and giving it a valuation a bit under $900 million. The lead underwriters included Deutsche Bank, JP Morgan and Band of America/Merrill Lynch.
The flash-memory storage area is hot, as a new generation of enterprise storage companies come online. But the market is also highly competitive, and industry leaders like EMC are not going to stand there watching. There has been some deal-making in the area, with Cisco Systems (CSCO) acquired Whiptail a few weeks ago for $415 million. But tech sources in Silicon Valley tell me the hottest storage company of the moment is Nimble Storage, which has yet to file to go public.
One problem with Violin is that its numbers aren't very pretty -- it has yet to show a profit. In Violin's 2013 fiscal year, ending Jan. 31, the company booked $73.8 million in revenue and lost $109.1 million. Ouch.
Violin is led by CEO Don Basile, who as the former CEO of Fusion-IO (FIO) is a well-known player in storage markets. But Fusion-IO hasn't done much since going public -- it still loses money and has a $1.4 billion market cap on revenues of $432 million. In the first six months of 2013 edning July 31, the company lost $59.2 mllion on revenue of $51.3 million.
Here's a roundup of news on the IPO:
Violin Memory's price craters after $162 million IPO (San Jose Mercury News)
Violin Memory Shares fall 15% in IPO (MarketWatch)
Violin Memory Prices IPO (VentureBeat)