Datto’s stock opens 19% above IPO price, then pulls back

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Shares of Datto Holding Corp. rallied out of the gate, as they opened 18.5% above the initial public offering price, before paring gains. The cloud-based software company, which is a wholly owned subsidiary of New York Stock Exchange parent Intercontinental Exchange Inc. , raised $594.0 million in the IPO, which priced at $27 a sjare, at the top of the expected range of $24 to $27 a share. With 157.55 million shares outstanding after the IPO, the pricing valued the company at about $4.25 billion. The stock’s first trade on the NYSE was at $32.00 at 12:05 p.m. Eastern for 2.3 million shares. The stock has pulled back since then, to trade 4.7% above the IPO price. Morgan Stanley, BofA Securities, Barclays and Credit Suisse were the lead underwriters. In the six months ended June 30, Datto recorded net income of $10.1 million on revenue of $249.1 million, after a net loss of $25.7 million on revenue of $214.9 million in the same period a year ago. The company has gone public at a time that the Renaissance IPO ETF has rallied 23.9% over the past three months while the S&P 500 has gained 6.6%.
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