Three of Wall St.’s blockbuster IPOs this year took heavy headers later on Thursday, the 5th of September 2019, after reveal of the company’s quarterly earnings’ report which failed to justify their IPO valuation alongside satisfy the investors.
In point of fact, business software maker Medallia took the heaviest tumbling later on Thursday (September 5th) and nosedived 12.3 per cent despite a better-than-anticipated quarterly earnings’ report. Aside from Medallia, cyber security firm, Crowdstrike curbed 8.7 per cent of its market cap following reveal of a quarterly earnings’ report that had beaten an analysts’ estimate, while even an upbeat quarterly projection for the cyber security firm had failed to avert a heavy loss.
Meanwhile, video conferencing provider, Zoom Video Communications fell as much as 2 per cent during extended trading hours, despite a better-than-expected quarterly earnings’ report. More critically, prior to Thursday’s (Sept.
5th) downward spiral, Zoom was up by 157 per cent of its initial public offering back in April, while Crowdstrike rose more than 150 per cent since the cyber security firm went public in June this year. Meanwhile, Medallia gained 74 per cent of its IPO valuation after setting out public trading in July.
While Thursday’s (Sept. 5th) sell-off raised an alarming bell for a higher valuation of the money losing companies, a Needham analyst, Alex Henderson said, “The strong print and weakness in the shares has been a recent pattern.
Investors are leery of this up-today, down-tomorrow market and seem to be selling into strength, and unwilling to let them ride, preferring to take profits. ”