Today, Wednesday, March 24, 2021, The New York Stock Exchange welcomes DigitalOcean, Inc. (NYSE: DOCN) in celebration of its IPO. In honor of the occasion, CEO, Yancey Spruill, along with John Tuttle, NYSE Vice President and Chief Commercial Officer, will call The Opening Bell®.
NYSE
Small-scale cloud infrastructure provider DigitalOcean debuted on the New York Stock Exchange on Wednesday under the ticker symbol “DOCN.”
The stock started trading at $ 41.50 per share, about 12% lower than the $ 47 price at which it sold stock at the initial public offering, and below the $ 44 to $ 47 per share range that the company provided in updates to its IPO prospectus. At opening price, it has a market capitalization of $ 4.37 billion.
Shares fell about 5.5% on Wednesday afternoon.
DigitalOcean is challenging much larger companies, including Amazon and Microsoft, in the marketplace to provide computing and storage resources that companies can use to run their software, rather than operating their own data center infrastructure. DigitalOcean has built a business by keeping its products user-friendly. Most of its revenue comes from the use of droplets, which are virtual segments of physical servers.
“We provide a personalized support experience for every customer, regardless of size, so we think making it easy and simple and helping our customers when they need it is the way to sustain the heart and mind of our developers and entrepreneurs every day Earning, ”CEO Yancey Spruill said on CNBC’s“ Squawk Alley. ”He said the market is big, with more than $ 100 billion in annual cloud spend for small and medium businesses.
DigitalOcean raised $ 775 million on the IPO. The company operates 14 of its own data centers in the US and abroad through lease contracts, and the company plans to continue to expand its footprint, just like its competitors. But unlike its major rivals, DigitalOcean doesn’t have billions of dollars that customers have agreed to pay for services they haven’t used yet. The company had less than $ 5 million in deferred revenue at the end of 2020.
In 2020, DigitalOcean recorded a net loss of $ 43.6 million out of a total of $ 318.4 million in revenue. The loss was 7% higher than in 2019 and sales grew by about 25%. In a presentation to potential investors, Chief Financial Officer Bill Sorenson said the company wants to increase the amount of money it receives from each customer while reducing research and development costs and general administrative costs as a percentage of revenue.
With its IPO price of $ 47, DigitalOcean was valued at a price-to-sale multiple of 16 based on 2020 revenue, compared to 12 for Microsoft.
– CNBC’s Ari Levy contributed to this report.
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