In the run-up to its initial public offering, cloud computing company #Nutanix scrambled to avoid a situation that has increasingly marred technology IPOs: a price that is below the most recent private funding round. After initially pricing shares at $11 to $13, a range that set the company up for a valuation nosedive, Nutanix on Thursday priced shares at $16 apiece. The higher-than-expected price values Nutanix at $2.2 billion, a boost from the $2 billion valuation it received in a 2014 private funding round. Nutanix, which is unprofitable, begins trading Friday on the Nasdaq under the symbol "NTNX." Nutanix may have squeaked by, but public offerings at a price below the private market valuation, once a rare event, have become quite common, especially for venture-backed companies worth $1 billion or more - the so-called unicorns. Such low-priced IPOs have been often been followed by lackluster public market performance, and can lead to problems with employee morale, recruitment and retention, dealmakers say. Of the 32 technology companies that went public with downrounds since the start of 2012, 53 percent are trading below their IPO price, based on an analysis of data provided by venture capital database PitchBook Inc. Shares of payments company Square Inc, storage firm Box Inc, big data company Hortonworks Inc and solar energy operator Sunrun Inc, all of which had their valuations slashed, are trading between $5 and $8 below their private market valuation. "That high valuation can really come back to haunt you," said Nate Gallon, a partner with Hogan Lovells law firm.
http://mobile.reuters.com/article/idUSKCN11Z2XR
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