The New York Stock Exchange welcomes DigitalOcean, Inc. (NYSE: DOCN) today, Wednesday, March 24, 2021, in celebration of its Initial Public Offering. To honor the occasion, the CEO, Yancey Spruill, accompanied by John Tuttle, NYSE vice president and commercial director, calls The Opening Bell®.
NYSE
Small-scale cloud infrastructure provider DigitalOcean debuted on the New York Stock Exchange on Wednesday, under the symbol “DOCN”.
The shares started trading at $ 41.50 per share, about 12% below the price of $ 47 for which it sold shares in its initial public offering, and below the range of $ 44 to $ 47 per share that the company provided updates to its IPO prospectus. In its opening price, it has a market capitalization of US $ 4.37 billion.
The shares fell about 5.5% on Wednesday afternoon.
DigitalOcean challenges much larger companies, including Amazon and Microsoft, in the market to provide computing and storage resources that companies can consume to run their software, instead of operating their own data center infrastructure. DigitalOcean has built a business by keeping its products easy to use. Most of its revenue comes from the use of droplets, which are virtual slices of physical servers.
“We give each customer, regardless of size, a personalized support experience, so we think that making it easy and simple and giving our customers help when they need it is the way to win the hearts and minds of our developers every day. and entrepreneurs, “CEO Yancey Spruill said on CNBC’s” Squawk Alley “. He said the market is large, with more than $ 100 billion in annual cloud spending for small and medium-sized businesses.
DigitalOcean raised $ 775 million in the IPO. The company operates 14 own data centers in the United States and abroad through leases, and the company intends to continue expanding its presence, like its competitors. But unlike its big 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 2019 and revenue grew about 25%. In a presentation to potential investors, CFO Bill Sorenson said the company wants to increase the amount of money it gets from each customer, while reducing research and development and overall administrative costs as a percentage of revenue.
With its IPO price of $ 47, DigitalOcean was valued at a sales price multiple of 16 based on 2020 revenue, compared to 12 for Microsoft.
– CNBC’s Ari Levy contributed to this report.
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