SecureWorks to End Long Tech IPO Drought

The shares are expected to price at the low end of the target range of $15.50 to $17.50.
Katie Kuehner-HebertApril 21, 2016

All eyes are on how SecureWorks’ initial public offering fares Thursday — the first tech IPO in four months — and whether other tech firms will follow suit and go public.

Dell parent Denali Holding Inc. is aiming to sell 9 million shares of its cybersecurity unit SecureWorks, in an offering that would raise $149 million at the midpoint of the price range. SecureWorks is to trade on the Nasdaq exchange under the symbol SCWX.

SecureWorks shares are expected to price at the low end of the $15.50 to $17.50 range the company is targeting, or possibly below it. The company’s lack of profitability may hurt the deal’s reception, according to The Wall Street Journal.

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SecureWorks’ IPO would end the longest drought in the IPO market in seven years for technology firms, due partly to private-market valuations that many investors see as inflated.

“Still, SecureWorks isn’t saddled with a rich private-market valuation like some Silicon Valley startups, and that could help smooth its entry into the public markets,” the WSJ wrote.

The last IPO within the tech industry was in mid-December. A number of closely watched tech IPOs of the past two years are trading below their IPO prices, including Hortonworks, Etsy, and Box.