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American cloud infrastructure provider DigitalOcean Holdings Inc (NYSE: DOCN) stock closed its first day of public trading 9.57% below the opening price. Notably, DigitalOcean stock went live on the NYSE on Wednesday at 12:40 p.m. Eastern time trading at $41.50, having availed 2 million shares.
The opening price was below the IPO price of $47.00. DigitalOcean had set a price range of between $44 and $47, but due to high demand, the stocks were sold on the higher end.
At the opening price of $41.50, DigitalOcean was valued at approximately $4.4 billion, but the figure adjusted accordingly as the trading went in during the day. Meanwhile, DigitalOcean stock is down approximately 1.15% in the pre-market to trade around $42.55.
DigitalOcean had anticipated raising approximately $775.5 million at a valuation of $4.95 billion. Notably, the company was offering up to 16.5 million shares during its initial public offering. Morgan Stanley, Goldman Sachs and JPMorgan are the lead underwriters for DigitalOcean stock.
DigitalOcean Performace that May Affect Its Stock
Last year, the company recorded a net loss of $43.6 million on revenue of $318.4 million. In 2019, the company reported a net loss of $40.4 million on revenue of $254.8 million. The spike in revenue was attributed to the growing demand for cloud computing technology fueled by the ongoing coronavirus pandemic.
However, there has been an emergency of tech-related companies that are focusing on providing cloud services. More global businesses are shifting to remote working conditions thus the need for up to standard cloud services.
In a bid to navigate successfully through the highly competitive market, the company has crafted its niche to offer in the global market. Notably, DigitalOcean provides developers with cloud services that help to deploy and scale applications that run simultaneously on multiple computers.
Having been founded 9-year ago in June 2011, the company has grown exponentially by venturing into different markets.
The company has been involved in various fundings in the past that have helped it scale its business to the global market. Back in 2013, DigitalOcean raised $3.2 million in a fund led by IA Ventures. A year later, the company concluded its Series A funding led by venture capitalist firm Andreessen Horowitz whereby it managed to raise $37.2 million. In 2015, DigitalOcean conducted its Series B round led by Access Industries with participation from Andreessen Horowitz, whereby it raised $83 million. Last year, the company raised $50 million from Access Industries and Andreessen Horowitz.
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