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
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (5) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (0) comments


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
LRTV Documentaries
OPNFV Director Opens Up on Women in Tech

6|25|15   |   3:25   |   (0) comments


Heather Kirksey, the director of the OPNFV, gets real about the gender disparity in open source and standards and discusses how we can change both the conversation and the gender dynamics.
LRTV Custom TV
Symantec's Service Provider Security Strategy

6|24|15   |   7:06   |   (0) comments


Didi Dayton explores Symantec's emerging enterprise security strategies for service providers. Highlights include 'killing the password,' self-defense, advanced analytics and adaptive response in a service provider architecture.
Between the CEOs
Debating Network Evolution With Cisco's Cedrik Neike

6|23|15   |   12:54   |   (2) comments


Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
LRTV Documentaries
Vodafone: What's Good for Moms Is Good for Business

6|23|15   |   3:04   |   (3) comments


Megan Doberneck, the general counsel for Vodafone Americas, discusses her company's progressive maternity policy, explains why promoting women in tech is good business and offers some some good advice for any women in the industry.
LRTV Interviews
NFV: Ready for Prime Time

6|23|15   |   05:09   |   (1) comment


At BTE 2015, Vip mobile CTO Dejan Kastelic talks about how NFV is ready for the real world and how Telekom Austria is introducing centralized resources for its group operations.
LRTV Documentaries
Tykes Talk Tech

6|22|15   |   02:30   |   (9) comments


What does optical fiber look like? When will 5G arrive? What's the WiFi password at Ikea? Light Reading sat down with three 8-year-olds to answer some of the communications industry's most burning questions...
LRTV Huawei Video Resource Center
Huawei Partners With TDC for World's First Early DOCSIS 3.1 Field Test

6|22|15   |   3:06   |   (0) comments


In a move to enhance user experience, Denmark's TDC aims to become an early adopter of DOCSIS 3.1. In partnership with Huawei, TDC recently ran the world's first field tests on its coax network that reached speeds nearing 1 Gbit/s.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
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
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
All Upcoming Live Events
Infographics
Hot Topics
Staying Productive With My Office-in-a-Bag
Mitch Wagner, West Coast Bureau Chief, Light Reading, 6/25/2015
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
What's in Your Office-in-a-Bag?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 6/26/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones