{"id":2148,"date":"2017-04-27T10:47:51","date_gmt":"2017-04-27T14:47:51","guid":{"rendered":"http:\/\/www.ipoboutique.com\/blog\/?p=2148"},"modified":"2017-04-27T10:57:50","modified_gmt":"2017-04-27T14:57:50","slug":"cloudera-ipo-a-win-for-unicorns-on-the-road-to-going-public","status":"publish","type":"post","link":"https:\/\/www.ipoboutique.com\/blog\/cloudera-ipo-a-win-for-unicorns-on-the-road-to-going-public\/","title":{"rendered":"Cloudera IPO a win for ‘unicorns’ on the road to going public"},"content":{"rendered":"

Plain and simple, Intel (Nasdaq: INTC)<\/strong>\u00a0vastly overpaid for Cloudera.<\/p>\n

It was May 2014 and large tech may have felt the pressure of being left behind….or not wanting to miss the boat on being a part of new tech.<\/p>\n

It was chaos and the birth of the ‘unicorn’ — a term for a company with a minimum of $1bn private valuation with substantial growth in terms of revenue while still operating at a loss.<\/p>\n

The latest ‘shiny-object’ at the time was Cloudera — a company that commercialized\u00a0an open source programming framework called Hadoop, which helps businesses process large amounts of disparate data. At Cloudera’s peak (which was the Intel investment), the company had a valuation of around $4.1bn or roughly $30\/share.<\/p>\n

The thought: it was a game-changing company with little competition.<\/p>\n

But since that time, other large tech (and small tech alike) have established products and services to compete\u00a0and\u00a0challenge Cloudera. Competition is excellent in the marketplace for advancements but also have a dramatic effect on valuation. When one of its smaller competitors, Hortonworks (Nasdaq: HDP), went public…the optimism was still ‘in the clouds’. ‘HDP’ opened with a 50% boost to its $16.00 offering price. But as of this writing, that same company is now trading roughly 35% below that offering price \u00a0with a secondary offering in the books in February 2016 that priced 8.4 million shares at $9.50.<\/p>\n

So, how will Cloudera be a win for ‘unicorns’?<\/p>\n

Many angel investors are sweating on the sideline.. getting a front row seat to Intel’s investment hair-cut. In the short-term, it will sting. But in the long term…it is most important for Intel to get their investment (Cloudera) out the door at the right price to influence and sell a long-term story. Large, pre-IPO investors are currently seeing value of the Cloudera offering as the deal, according to our sources, is more than 20x oversubscribed with current price guidance coming in $1.00-$2.00 above the prevailing $12.00-$14.00 range.<\/p>\n

One syndicate source called this a “typical technology home-run”.<\/p>\n

Cloudera, and Intel for that matter, is looking for the pre-IPO investors to stabilize the stock in the short term and possibly buy more into the story in the long term. Do not be surprised that if 6-12 months down the road you hear of a Cloudera secondary offering. But with the IPO coming out as a (presumed) success, the follow-on will likely be an easier sell given the positive sentiment in the name.<\/p>\n

And by the way, Intel is not holding the bag without a fight. They still very much believe in this company as they are indicating interest in purchasing up to 10% of the IPO.\u00a0Is this the beginning of averaging down at the IPO for companies who made bad bets?<\/p>\n

Whether it is or not, it will be a good blueprint on how to handle an investment gone wrong once it hits the public markets.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Plain and simple, Intel (Nasdaq: INTC)\u00a0vastly overpaid for Cloudera. It was May 2014 and large tech may have felt the pressure of being left behind….or not wanting to miss the boat on being a part of new tech. It was chaos and the birth of the ‘unicorn’ — a term for a company with a[…]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"zakra_general_container_width":0,"zakra_general_content_width":0,"zakra_general_sidebar_width":0,"zakra_sticky_header":"customizer","zakra_header_main_area":true,"zakra_site_logo_width":0,"zakra_header_top_enabled":"customizer","zakra_header_top_style":"customizer","zakra_primary_menu_item_style":"customizer","zakra_page_header_text_color":"","zakra_page_header_layout":"customizer","zakra_page_title_bg":"","zakra_footer_widgets_bg_image":0,"zakra_page_title_bg_repeat":"customizer","zakra_page_title_bg_position":"customizer","zakra_page_title_bg_size":"customizer","zakra_page_title_bg_attachment":"customizer","zakra_breadcrumbs_enabled":"customizer","zakra_breadcrumbs_text_color":"","zakra_breadcrumbs_separator_color":"","zakra_breadcrumbs_link_color":"","zakra_breadcrumbs_link_hover_color":"","zakra_page_title_bg_image":0,"zakra_footer_widgets_enabled":"customizer","zakra_footer_column_layout_1_style":"customizer","zakra_footer_widgets_bg":"","zakra_footer_widgets_bg_repeat":"customizer","zakra_footer_widgets_bg_position":"customizer","zakra_footer_widgets_bg_size":"customizer","zakra_footer_widgets_bg_attachment":"customizer","zakra_footer_bar_enabled":"customizer","zakra_footer_bar_style":"customizer","footnotes":""},"categories":[24],"tags":[],"class_list":["post-2148","post","type-post","status-publish","format-standard","hentry","category-ipo"],"_links":{"self":[{"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/posts\/2148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/comments?post=2148"}],"version-history":[{"count":3,"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/posts\/2148\/revisions"}],"predecessor-version":[{"id":2153,"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/posts\/2148\/revisions\/2153"}],"wp:attachment":[{"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/media?parent=2148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/categories?post=2148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ipoboutique.com\/blog\/wp-json\/wp\/v2\/tags?post=2148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}