So far, this year has been excruciatingly slow for initial public offerings from the technology sector. But today (June 23) proved to be a bright spot with the market debut of Twilio, a San Francisco-based company that sends text messages on behalf of services like Uber and Whatsapp.
In their first day of trading on the New York Stock Exchange, shares in Twilio (ticker: TWLO) leapt 90% from their IPO price of $15 each. The stock popped 60% at the open to $23.99, and ended the day at $28.53.
The stellar first-day performance of Twilio is a huge sigh of relief for Silicon Valley. With easy access to private money, many tech companies have chosen to stay private for longer. But as their values ballooned, many began questioning whether there was a disconnect between the valuations private and public markets would assign to the firms. Twilio has yet to turn a profit in its eight-year history, but investors are betting on future growth.
Twilio’s IPO also serves as a stark contrast to the debut of Dell’s cybersecurity arm. SecureWorks, the first tech IPO of 2016, saw lackluster performance. Shares opened at $13.89, below the $14 IPO price (which was already below the expected range of $15.50-$17.50) before ending their first day flat.