Cloudflare (NYSE:NET) announced it is launching an Initial Public Offering (IPO) today Friday 13. Each share is expected to have a price to the public of $15. The company will be offering 35,000,00 shares of its Class A common stock. The information was announced by the company in a press release.
After the recent debut at the NYSE, Cloudflare registered a price increase of 27% reaching the high of $19.53 per share. In addition to it, The Fastly stock price (NYSE:FSLY), one of the main competitors of Cloudflare fell 6.3%.
Cloudflare informed they are launching an IPO of its Class A common stock. As mentioned before, the goal is to offer 35,000,00 shares with an additional 5,250,000 shares for underwriters to purchase at the IPO price less underwriting discounts.
These shares will be traded on the New York Stock Exchange (NYSE) today, September 13. The ticker symbol for these shares will be “NET” and it is expected to end on September 17.
As per the report released by the company, Goldman Sachs, Morgan Stanley, and JP Morgan Securities are acting as joint lead-book-running managers for the offering. Other companies acting as joint book-running managers include Jefferies, Wells Fargo Securities, and RBC Capital Markets.
The company is currently offering a different number of cloud-based services that include firewalls, routing, virtual private networks (VPNs), load balancing and traffic optimization. Million of websites all around the world are already using the company’s services. Nevertheless, the firm faced many challenges to generate positive cash flow.
In order to launch this IPO, Cloudflare had to fil a registration statement with the U.S. Securities and Exchange Commission on September 12.
The firm is facing many different challenges, however, the most important one is related to how to transform the current user base in profits. Users that are currently using the free options should start paying for some of the services they use while those paying for premium services may pay even higher prices.
In addition to it, the firm could have provided services to individuals related to illegal markets or terrorist groups. Due to this reason, the firm decided to terminate its services to 8chan, a controversial forum that has been linked to mass shootings.
CloudFlare has 1069 employees and it was launched back in 2009. As an established and recognized company, CloudFlare has the necessary tools to face the aforementioned challenges without having troubles. This IPO could be just the beginning of a new business strategy created by the company.
During the interview on CNBC Cloudflare’s CEO and co-Founder Michelle Zaltyn said:
“Cybersecurity is a big field. There are lots of ways to be secure. Cloudflare helps secure at the network layer and so everyday we stop 44 billion cyberattacks on behalf of our customers and we are the first line of defence that protects all the 20 million internet users of Cloudflare in the world.”
Featured Image via The Muse