Economy

Switch shares rocket 44% on their first day of trade

Switch shares rocket 44% on their first day of trade”

Switch's IPO was priced at $17 per share, above the previously outlined $14-$16 range, and raised $531.3 million, making it the second-biggest USA technology listing this year after Snapchat-owner Snap Inc. It sold 31.25 million shares for $513 million at a market capitalization of $4.2 billion, which has since risen to about $5.6 billion.

Because Switch's data centers are energy efficient and the company tends to hang on to customers for several years, Switch aims to be well-positioned to capitalize on data-intensive technology trends like the Internet of Things, wearable devices and autonomous vehicles, the prospectus said.

According to Bloomberg data, the Switch IPO was the third-biggest tech offering in the United States this year, behind Snap Inc's $3.9 billion float and Altice's $2.2-billion listing. But Switch isn't the only data center provider for eBay, Amazon, and others. Unlike numerous other tech firms to have the hit the stock market in recent quarters, the company is profitable.

Switch competes with CoreSite Realty ( CORE ), CyrusOne ( CONE ), Digital Realty Trust ( DLR ) and Equinix ( EQIX ). The jump represents a more than 30 percent increase over the $17 issue price in Switch's initial public offering on Thursday.

Switch reported $31.4 million in net income for 2016 and $73.5 million in 2015.

The company's 2013 revenue was $166.8 million, meaning its compound annual growth rate has been 24 percent over the last three years. Its 2015 revenue was $265.9 million.



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