Shares of Domo, Inc. (NASDAQ:DOMO) stock plummeted 39.2% in July, according to data provided by S&P Global Market Intelligence. The data analytics company had its initial public offering on June 28, with shares up roughly 30% at the end of the stock's first day of trading. It didn't take long for the big gains to reverse, however.
Domo priced its initial public offering at roughly $21, valuing the company at roughly $510 million. Shares reached $27.30 at market close on June 28, and the company raised $193 million through the offering.
Domo has a cloud-based operating system tailored to provide data integration and analytics services for businesses. These features are meant to simplify business processes to the point where CEOs and other high-level management can make important operational decisions from their mobile devices.
Other than some skeptical coverage about the stock, there doesn't appear to have been much in the way of business news behind its big decline in July. Instead, the decline looks like a case of IPO excitement cooling off and its big opening gains reversing as a result. Domo's roughly $400 million market capitalization sits well below the roughly $2 billion valuation that the company had as a private entity earlier this year, but that doesn't necessarily mean that the stock is a bargain.
As Motley Fool tech specialist Evan Niu points out, Domo posted a loss of $176.6 million on $108.5 million in sales in its last fiscal year. Marketing alone accounted for more expenses than sales recorded in the period.
Even after raising roughly $200 million through its IPO, Domo will have to address its cash situation. The company had just $72 million in its coffers as of April and recorded negative free cash flow to the tune of $148.7 million last fiscal year.