SentinelOne Closes 21% on Debut as Highest Value Cybersecurity IPO

Shares of cybersecurity firm SentinelOne closed up more than 20% on its market debut Wednesday on the New York Stock Exchange, trading under the banknote symbol “S”. The stock closed at $ 42.50, giving the company a market capitalization of more than $ 10 billion.

SentinelOne traded 35 million shares at $ 35 each Tuesday, above its initial target range of $ 31 to $ 32. The company raised $ 1.2 billion with an implied valuation of $ 8.9 billion, beating the debut in the CrowdStrike’s $ 6.7 billion market in 2019, and the big cyber defense IPO winner from a previous era, McAfee, to become the highest valued cybersecurity IPO in history, according to data from CB. Perspectives.

It’s a CNBC Disruptor 50 company that was ranked No. 4 on this year’s list.

In its initial public offering prospectus, SentinelOne disclosed revenue growth of 108% year-over-year to $ 37.4 million, while net losses more than doubled from $ 26.6 million to $ 62.6 million. .

“The market we are heading into is huge,” Chief Executive Tomer Weingarten said on CNBC’s “Squawk on the Street” Wednesday morning before the stock began trading. “As you see this massive wave of digital transformation … customers are transitioning to the cloud and that creates a great opportunity for us to expand all these different footprints in the business.”

SentinelOne’s competitors have been among the big IPO winners in recent years, with CrowdStrike, which Weingarten has referred to as its “top competitor,” now valued at more than $ 46 billion. But more of your competitors are now also talking about the threat SentinelOne poses.

In recent months, CrowdStrike and Qualys first named SentinelOne as a competitor in their annual reports. And after the coronavirus pandemic hit, Palo Alto Networks CEO Nikesh Arora began talking about SentinelOne in conversations with analysts; referenced the company three times in a recent earnings call.

“We maintain an incredible win rate across all competitors,” Weingarten told CNBC on the day of the company’s IPO. “Obviously, the established vendors in our space are relatively weak, using outdated technologies that are not up to the current threat landscape, so it’s about continuing to gain market share for us.”

More recently, the company’s autonomous endpoint security stopped SUNBURST, the malware that tricked systems into loading it as an update to SolarWinds Orion software, which is used by thousands of organizations. AT&T, JetBlue and McKesson were among SentinelOne customers protected by the SolarWinds hack.

Morgan Stanley, Goldman Sachs, Bank of America Securities, Barclays and Wells Fargo Securities were the primary underwriters to the SentinelOne offering.

—CNBC’s Jordan Novet contributed to this report.

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