Light Reading

A10 IPO Sputters Off the Ground

Mitch Wagner
3/21/2014
50%
50%

The application delivery controller peddler A10 Networks had a tepid start to its first day of trading as a public company Friday.

As of 2:05 p.m. ET, the stock price was $15.55, up about 3.7% from the IPO price of $15. A10 initially traded below its IPO price, starting at $13.75. A10 Networks Inc. sold 12.5 million shares in its IPO, raising $187.50 million.

How does Lee Chen, founder and CEO, feel about the pricing? "I'm more the long-term value investor, so I don't pay attention to one day trading up or down," Chen told us, dodging the question diplomatically.

A10 Networks founder and CEO Lee Chen rings the opening bell on the New York Stock Exchange. Given the stock's tepid performance on the first day of trading, he should have just tapped the bell gently.
A10 Networks founder and CEO Lee Chen rings the opening bell on the New York Stock Exchange. Given the stock's tepid performance on the first day of trading, he should have just tapped the bell gently.

Other business software stocks with recent IPOs performed a lot better, The Wall Street Journal reports (subscription required). For example, the retail e-commerce software maker Borderfree Inc., which also started trading Friday, had gained 23% by midday, passing its IPO price of $16 to trade at about $19.50. The health plan software provider Castlight Health had gained 149%.

Financial journalists and Wall Street watchers look for rocket rides on the first day of an IPO, but spectacular first-day gains funnel most of their rewards to IPO underwriters and first-day speculators. Modest IPO gains reward the people who actually helped build a newly public company: venture capitalists, employees, and other early investors.

So what about that long-term value? A10 reported that its revenue rose 18% last year to $141.7 million last year after rising 32% the previous year.

Revenue growth over the last four years has been 37% annually, Chen said. The company has made a business decision to invest in long-term growth, and it has a three- to five-year model to achieve profitability.

A-10 is "playing at the center of four megatrends," Chen said: big data, mobility, security, and cloud computing. Its appliances provide load balancing, application delivery, quality of service, password management, and more. A10 launched a DDOS protection product in January. (See A10 Enters DDOS Protection Market.)

From 2010 through 2013, A10 was weighed down by an intellectual property lawsuit filed against the company by Brocade Communications Systems Inc. (Nasdaq: BRCD). That suit was settled in May 2013. A10 says it hurt it through the direct costs of fighting the litigation and by reducing demand for A10 products due to marketplace uncertainty. Now that the suit has been settled, A10 expects demand to pick up briskly. (See Brocade & A10 Settle.)

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to mwagner@lightreading.com.

Related posts:


Want to learn more about SDN and the transport network? Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place June 17-18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.


(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
3/23/2014 | 3:55:38 PM
Re: Congrats
I think that the comment from the CEO isn't diplomatic. The purpose of the leader of the company is to build that long term value.

These guys have to think ahead, often further out than the time that they will hold the postion in order to best prepare a company for the future. 
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/21/2014 | 9:20:56 PM
The market
The ADC market is really interesting right now with a lot of companies jockeying for bigger shares with Cisco backing out. Long-term, how they use this money and higher profile to gain some advantage in that market will be very telling.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/21/2014 | 5:46:52 PM
Re: Congrats
That's the way I read it too -- early investors get paid back, with a little something for people who bought the IPO stock. A good day. But I'm no expert. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/21/2014 | 5:20:52 PM
Closing price
Closing price: $16.21. I'll declare anything above the IPO price to be a victory, and call it a weekend. But I'm no IPO expert -- what do you think?
schlettie
50%
50%
schlettie,
User Rank: Light Beer
3/21/2014 | 5:15:53 PM
Congrats
A10's bankers priced the shares fairly for their investors and didn't low-ball them to benefit the bankers' cronies.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
LRTV Custom TV
DOCSIS 3.1: Transforming Cable From Hardware-Defined Network to Software-Defined Network

4|29|15   |   03:48   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explains how DOCSIS 3.1 can transform cable HFC network to a more agile software-defined network.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
10 Alternate Uses for Tablets
Eryn Leavens, Copy Desk Editor, 5/22/2015
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Comcast Targets 6 New Gigabit Markets
Mari Silbey, Senior Editor, Cable/Video, 5/21/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 10 AM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
My ongoing interview tour of the leading minds of the telecom industry recently took me to Richardson, Texas, where I met with Rod Naphan, CTO and SVP, Solutions, ...
Cats with Phones
Too Fluffy to Talk Click Here
Elmer found that his bountiful fur got in the way of meaningful conversation.