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Cybersecurity firm CrowdStrike first day of trading on the Nasdaq saw $CRWD surge 90% from its IPO price of $34. $CRWD cloud-based security software customers include Amazon Web Services and Credit Suisse. PR from high profile hacking including North Korea, Russia and China help.

Strike Ware

IPO First Day

CrowdStrike soared as high as 97% on its first day of trading on the NASDAQ Wednesday.

CRWD opened trading at $63.50 well above the IPO price of $34 a share, which was above the high end of its expected range of $28 to $30 per share. The stock's market cap is now over $11 billion, nearly quadruple the valuation from its last private round in June 2018.

CrowdStrike Debut

The IPO

Class A shares were offered to the public, while Class B shares with voting rights will mostly be controlled by current investors and executive directors. Warburg Pincus, a private equity firm, is the largest Class B shareholder with around 30% stake at the time of the offering.

  • CrowdStrike priced 18 million shares at $34 late Tuesday,
  • Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch and Barclays led Crowdstrike’s IPO.

CrowdStrike Debut

About CrowdStrike

The company uses cloud-based technology to detect and prevent breaches. CrowdStrike was founded in 2011 in Sunnyvale, California. It launched its first end-point security product two years later. As of Jan. 31, it had more than 2,500 subscription customers worldwide. That includes 37 of the top 100 global companies, and nine of the top 20 major banks, it said.Credit Suisse, Tribune Media and Amazon Web Services are among its customers.

CrowdStrike may be best known for its role in investigating the now infamous 2016 breach of the Democratic National Committee’s servers.

CRWD recorded a net loss of $140 million for the year ended Jan. 31, while revenue more than doubled to $249.8 million according to the company’s prospectus.

CEO George Kurtz told CNBC’s “Squawk Alley ” he thinks his company stands out from other security stocks because it’s been built up using cloud technology. “There’s been no Salesforce of security, ” Kurtz said. “And we think we’ve taken the right approach and created the right architecture to be that fourth pillar of cloud computing.”

High Profile Cases and Marketing

High-profile hack incidents tracked by CrowdStrike include tracing the 2016 Democratic National Committee email leak to Russia. CRWD also uncovered the he source of a 2014 Sony Pictures hack to North Korea. Lately is has been involved wit law enforcement agencies watching Chinese espionage in the US. Analysts say this helped cut the firm's sales and marketing costs as a percent of total revenue to 69% in fiscal 2019 from 88% a year ago.

CrowdStrike’s sales and marketing spend increased 66% last year to $172.7 million, according to the company’s prospectus.

“Security, and in our particular area, it’s really a greenfield opportunity,” he said. “There’s a lot of frustration with the incumbent vendors. So our sales and marketing spend has really been focused on capturing market share and delivering our solution into geographies that we haven’t been in and into verticals that we didn’t have the penetration when we first started the company. So we feel comfortable with the unit economics and we feel comfortable with the marketing spend given where we are as a company.”

Competitors

Crowdstrike’s competitors include Blackberry-owned Cyclance, Zscaler Inc (NASDAQ: ZS) and Tenable Holdings (NASDAQ: TENB) and Carbon Black (NASDAQ: CBLK), McAfee

Source:CrowdStrike SEC

From TradersCommunity Research

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