What happened
A new kid on the stock market block, SentinelOne (S 6.50%) on Tuesday delivered some very encouraging news about its recent initial public offering (IPO). This pushed its shares 11% higher.
So what
SentinelOne happily reported on Tuesday morning that the IPO's underwriters fully exercised their overallotment option to buy a combined total of 5.25 million shares of the company. They are paying $35 per share, which matches the IPO price.
Image source: Getty Images.
Typically in an IPO, the underwriters are granted an option to purchase additionally issued stock. Depending on their level of confidence in the issuer, they may choose to buy some, none, or all of the shares offered.
SentinelOne, which operates in the white-hot segment of cybersecurity within the tech sector, had an auspicious debut on the exchange last Wednesday. The shares closed at $42.50 apiece, 21% above the IPO price.
Now what
Investors, institutional and otherwise, are clearly unconcerned that this makes the company very expensive on a valuation basis. They like its business, which is enjoying high demand in the wake of a string of high-profile hacks. SentinelOne hasn't been profitable, but it did manage to more than double its revenue in 2020 to over $37 million.
The novelty glow of the IPO will likely fade somewhat, as it usually does, but this recent stock market arrival is in the right place at the right time. As such, it should remain very much on the radar of many investors.
