Newest Tech IPO Doubles on Day One

It never ceases to amaze me how profitless companies can come to market and all of a sudden be worth billions of dollars.  We have yet another case this week with the IPO of Splunk $SPLK.  Splunk provides an innovative software platform that enables organizations to gain real-time operational intelligence by harnessing the value of their data. Its software collects and indexes data at massive scale, regardless of format or source.  Founded in 2004, Splunk set out to build a Google for machine data—essentially a search engine for all the data that servers, network switches and any device such as smartphones with a processor spits out when those devices are in use. The company's name is a play on "spelunking," or caving.


Splunk more than doubled in price on it's opening trading day Thursday gaining 109%.  That makes the Splunk debut the highest gaining IPO of the year.


Via the WSJ

• Start-ups like Splunk that are solving problems for businesses are seen as the next wave, even if they don't grab headlines the way companies whose websites are used by everyday people do.
• "By the end of this calendar year, the general public will clearly understand that this big enterprise wave is beginning," said John Connors, a venture capitalist at Ignition Partners and a Splunk board member.

• Splunk is capitalizing on an explosion of interest in Big Data as businesses generate more and more data sets that they need to collect, organize and analyze. While many large tech companies, such as International Business Machines Corp. and EMC Corp. are now pushing similar data management and analytics products, Splunk is widely seen as the first pure play to go public.
• Despite its promise, Splunk has yet to reap a profit as it spends heavily to rev up its growth. Its loss widened to $11 million for the year ended in January, from $3.8 million a year earlier. The company is growing fast, though, with revenue rising 83% to $121 million for the fiscal year.
• "The market appears to be giving us a first-mover advantage on Big Data," Godfrey Sullivan, Splunk's chief executive, said in an interview.   Mr. Sullivan's background certainly helped. Before joining Splunk in 2008, he was the CEO of software company Hyperion Solutions Corp., which he sold to Oracle Corp. for $3.3 billion in 2007. Splunk's valuation in its first day as a public company came close to that figure, which Mr. Sullivan said surprised him.
• "It's nice to see that kind of welcome," he said. Mr. Sullivan's 7.1% stake is now worth about $243 million.