Please ensure Javascript is enabled for purposes of website accessibility

JFrog IPO Surges 47% on Its First Day of Trading

By Danny Vena - Sep 17, 2020 at 5:25AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The "liquid software" specialist becomes the latest IPO stunner.

JFrog (FROG -4.48%) became the latest tech unicorn to have a successful initial public offering (IPO) after investors scooped up the stock. The company makes what it calls "liquid software," also called continuous software release management (CSRM) for developers, which helps ensure users have the most recent versions of software. Due to significant interest, the stock price was increased numerous times over the past week.

Management initially priced the shares in a range of $33-$37 per share, but bumped the range to $39-$41 per share after heavy demand. Even that wasn't enough, and JFrog shares were eventually priced at $44 on Wednesday prior to its debut.

A person looking at a computer screen showing mobile app development.

Image source: Getty Images.

Following a pattern that has played out repeatedly with software-as-a-service (SaaS) and cloud computing companies in recent months, investors snapped up shares at an impressive rate. When the stock began trading at roughly 12:30 p.m. Eastern, shares surged to $71.27, up 62% from its asking price, before ending the day at $64.79, an increase of 47%. 

With more than 8 million shares on offer, JFrog raised $352 million, valuing the company at nearly $5.75 billion. After the IPO and the sale of shares by existing shareholders, insiders and early investors will still control 87% of ordinary shares.

Investors were no doubt drawn to the company's impressive financial results. In 2019, JFrog reported revenue of $105 million, up 65% year over year, while also narrowing its losses from $26 million in 2018 to just $5 million in 2019.

Both trends continued into the first six months of 2020. Revenue of $69 million grew 50% year over year, and JFrog found itself on the verge of profitability, with losses of just $426,000. The company also boasts an enviable balance sheet, with about $170 million in cash and short-term investments and no debt. 

Fellow freshman Snowflake (SNOW -3.74%) also made its market debut today, with shares climbing 113% on its first day of trading.

Danny Vena has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

JFrog Ltd. Stock Quote
JFrog Ltd.
$25.17 (-4.48%) $-1.18
Snowflake Inc. Stock Quote
Snowflake Inc.
$167.88 (-3.74%) $-6.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.