Rubrik, which priced shares on Wednesday at $32, saw them climb as high as $40 on Thursday in the stock’s first full day of trading. Shares closed at $37, still a gain of nearly 16%.
The Microsoft-backed tech firm initially was seeking a price range of $28 to $31, according to its S-1 filing with the Securities and Exchange Commission. The public offering, which was 20 times oversubscribed, pushed the company’s value to roughly $5.6 billion.
Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, explained that Rubrik’s initial gains appeared a bit muted compared with those of other popular tech stocks largely because of institutional interest. Also, he said, according to his own research, it’s a trend he’s noticed among companies with revenue of at least $100 million.
“This is a company that mainly institutional investors are interested in,” Ritter told Fortune. “It doesn’t have big household name recognition like Reddit. So, basically, institutional investors are setting the price here, and institutional investors get it right on average.”
Rubrik last year posted annual revenue of $784 million. However, the company isn’t yet profitable, reporting a net loss of $97.5 million for the quarter ending Jan. 31. A year earlier, that figure was $86 million.
“This shows that the market is willing to purchase money-losing but growing tech companies that have large future profit potential,” Ritter added.
Rubrik’s IPO is the latest in a run of tech IPOs that have helped reinvigorate the public markets. Last week, Walmart-backed Ibotta was able to raise $577 million when it set an above-range offer price of $88, and then its shares jumped 17%. In March, after their own IPOs, the social media company Reddit saw its shares gain 48% and those of chip firm Astera Labs rocketed 72%.
