The debut of Darktrace Plc on the stock market was marked by a surge of investor enthusiasm as the cybersecurity company’s shares performed strongly right out of the gate.
After an impressive opening, the stock price shot up to an astonishing 44% increase, trading at 359.65 pence on the London Stock Exchange. The initial public offering helped Darktrace to accumulate a sum of £165 million (approximately $230 million), resulting in a market capitalization of nearly £1.7 billion.
Contrary to its initial projection of a $4 billion valuation and a May 5 trading commencement, Darktrace advanced its IPO, a move on which the company has not commented publicly. The IPO also resulted in current shareholders disposing of £21.7 million worth of shares.
Setting the price range earlier in the week at 220p-280p suggested a valuation of £1.6bn to £1.9bn for the company.
Investment expert Susannah Streeter from Hargreaves Lansdown remarked on the low-profile approach Darktrace took to enter the market, highlighting the company’s conservative pricing strategy in the wake of Deliveroo’s troubled launch.
Mike Lynch, Britain’s renowned entrepreneur and the figure behind Invoke Capital Partners, is among early backers of Darktrace. Lynch, also the founder of Autonomy Corp., is presently entangled in a high-stakes legal dispute, with allegations from Hewlett-Packard Co. of financial malpractice leading up to their $10 billion acquisition of Autonomy.
Ahead of the IPO, Darktrace cautioned investors of the potential risks associated with its management’s links to Autonomy, signaling the possibility of future charges. The company’s connections extend to its CEO, Poppy Gustafsson, among other executives.
As part of its national strategy, London aspires to be the chosen location for UK tech firms to list, counterbalancing their preference for the US markets, which offer broader investment opportunities. Darktrace’s leap to the public domain is noteworthy, being the first sizeable entity to do so following the Deliveroo Holdings Plc’s rocky listing and subsequent 30% share price dip.
CEO Poppy Gustafsson expressed the company’s pride in listing on the London Stock Exchange, citing the UK’s rich legacy in scientific and mathematical innovation as foundational to Darktrace’s ethos.
Michael Hewson of CMC Markets pointed out the heightened caution amongst London’s financial circles post-Deliveroo, suggesting that Darktrace managed to circumvent such valuation missteps. The firm’s expertise lies in understanding its clients’ operational landscapes and pinpointing irregularities that could signal cybersecurity risks.
With the funds from the IPO, Darktrace plans to speed up the development of new products, strengthen its financial standing, and gain greater fiscal agility. The sale was orchestrated by Jefferies International Ltd., Joh. Berenberg, Gossler & Co. KG, and KKR Capital Markets Partners LLP, with Needham & Co. and Piper Sandler & Co. serving as joint bookrunners.
