5 ms·

That's very interesting since they were IPOing. The price reported at 3.7B is not much higher than what was expected from their IPO. 2017, in my opinion, is g

by ejcx 10y ago

That's very interesting since they were IPOing. The price reported at 3.7B is not much higher than what was expected from their IPO. 2017, in my opinion, is going to be a very interesting year in tech.

bklyn11201 10y ago
My reading indicates that AppDynamics was going to be valued very similarly to New Relic, somewhere around $1.75B. http://tomtunguz.com/appd-s-1/ http://tomtunguz.com/appd-s-1/ http://seekingalpha.com/article/4037830-new-new-relic-side-side-look-appdynamics-closest-peer http://seekingalpha.com/article/4037830-new-new-relic-side-s...
mathattack 10y ago
Perhaps they had some insight that it wasn't going to be that strong? Public markets are very unforgiving if you have a few bad quarters. That 3.7B IPO could wind up a 2B company after a few of those. CISCO stock won't get crushed by a couple bad quarters from AppDynamics.
- nemo44x 10y ago
  They've been increasing the initial offer price the last week as demand was high. From $10 to $14 a share. That's a positive sign for them. To then get bought out at 100% premium from that is massively prosperous exit. Consider their last private valuation was 1.9 billion it sounds like the investors, founders and employees all have reason to celebrate tonight. Congrats to them all for this very fortunate exit.
  - sulam 10y ago
    FWIW I was prepared to short the heck out of this stock at that valuation, so perhaps it's good for them to get the liquidity now vs after a few quarters in a rough market.
  - mathattack 10y ago
    Interesting. You clearly have more insight than me on this. One thought on the premium to the final round... Late growth investors are still looking for 3X returns (Versus say 10X from early investors) and the earlier investments carry a liquidity discount. 2X is still very good, but it's not the return that will carry the losers in the fund. And yes - they should all celebrate. As should the rest of us! Every unicorn that exits reduces the backlog, and provides more liquidity for the rest of us.
  - atishd 10y ago
    believe the investors (who had a contractual right to purchase additional shares in ipo) exercised that right, so there was actually expectation of good public market performance. nothing beats a sure thing though... M&A valuation avoids having everyone watching the stock price daily
nemo44x 10y ago
It's over 100% more than the 1.7 billion they were estimated to IPO at. That's a huge premium. And I might look at going long NEWR as their financials and prospects look the same and they're trading at 1.7b today.
- inthewoods 10y ago
  Heard a rumor that there was a bidding war with Microsoft and IBM in the hunt so somehow 16x revenue makes sense.
  - nemo44x 10y ago
    Very interesting. Happy for them and if that rumor is true I'd expect New Relic to pop on that. Especially as their growth is as good, burn is less and have been well managed too.
    - sulam 10y ago
      At best this removes a potential suitor. If MSFT was trying to buy AppDynamics they may go after an alternative, but that's the only scenario where you revalue New Relic in light of this deal.
      - nemo44x 10y ago
        NEWR up 20% pre market.
        sulam 10y ago
        Looks like the initial reception is positive, yep (more like 10-15%, it'll be interesting to see where it settles). If it goes up enough I'll short it, too -- horribly overpriced tool. :)
  - Eridrus 10y ago
    Does AppDynamics have some appreciable lock in that would make Microsoft want to buy them, rather than compete?

by ejcx 10y ago

bklyn11201 10y ago

My reading indicates that AppDynamics was going to be valued very similarly to New Relic, somewhere around $1.75B. http://tomtunguz.com/appd-s-1/ http://tomtunguz.com/appd-s-1/ http://seekingalpha.com/article/4037830-new-new-relic-side-side-look-appdynamics-closest-peer http://seekingalpha.com/article/4037830-new-new-relic-side-s...

mathattack 10y ago

Perhaps they had some insight that it wasn't going to be that strong? Public markets are very unforgiving if you have a few bad quarters. That 3.7B IPO could wind up a 2B company after a few of those. CISCO stock won't get crushed by a couple bad quarters from AppDynamics.

nemo44x 10y ago
They've been increasing the initial offer price the last week as demand was high. From $10 to $14 a share. That's a positive sign for them. To then get bought out at 100% premium from that is massively prosperous exit. Consider their last private valuation was 1.9 billion it sounds like the investors, founders and employees all have reason to celebrate tonight. Congrats to them all for this very fortunate exit.
- sulam 10y ago
  FWIW I was prepared to short the heck out of this stock at that valuation, so perhaps it's good for them to get the liquidity now vs after a few quarters in a rough market.
- mathattack 10y ago
  Interesting. You clearly have more insight than me on this. One thought on the premium to the final round... Late growth investors are still looking for 3X returns (Versus say 10X from early investors) and the earlier investments carry a liquidity discount. 2X is still very good, but it's not the return that will carry the losers in the fund. And yes - they should all celebrate. As should the rest of us! Every unicorn that exits reduces the backlog, and provides more liquidity for the rest of us.
- atishd 10y ago
  believe the investors (who had a contractual right to purchase additional shares in ipo) exercised that right, so there was actually expectation of good public market performance. nothing beats a sure thing though... M&A valuation avoids having everyone watching the stock price daily

nemo44x 10y ago

It's over 100% more than the 1.7 billion they were estimated to IPO at. That's a huge premium. And I might look at going long NEWR as their financials and prospects look the same and they're trading at 1.7b today.

inthewoods 10y ago
Heard a rumor that there was a bidding war with Microsoft and IBM in the hunt so somehow 16x revenue makes sense.
- nemo44x 10y ago
  Very interesting. Happy for them and if that rumor is true I'd expect New Relic to pop on that. Especially as their growth is as good, burn is less and have been well managed too.
  - sulam 10y ago
    At best this removes a potential suitor. If MSFT was trying to buy AppDynamics they may go after an alternative, but that's the only scenario where you revalue New Relic in light of this deal.
    - nemo44x 10y ago
      NEWR up 20% pre market.
      - sulam 10y ago
        Looks like the initial reception is positive, yep (more like 10-15%, it'll be interesting to see where it settles). If it goes up enough I'll short it, too -- horribly overpriced tool. :)
- Eridrus 10y ago
  Does AppDynamics have some appreciable lock in that would make Microsoft want to buy them, rather than compete?