Shares of the company fell as much as 8 percent in its debut on Friday, a day after it priced its initial public offering of 8.4 million shares at $15 per share, the top end of its range.
At that price, the company is valued at $126 million.
“It’s an example of a company priced aggressively, rather than priced conservatively,” said Jay Ritter, an IPO expert and professor of finance at University of Florida.
Investors remain cautious about the U.S. IPO market, which has seen a string of truncated issues, withdrawals, delayed offerings and weak debuts this year, and the market is not expected to improve anytime soon.
“The IPO market improvement would come from a fiscal deal worked out with the Congress,” David Menlow, president of IPOfinancial.com, told Reuters.
Sunnyvale, California-based Ruckus, backed by venture capital firm Sequoia Capital, filed for a $100 million IPO in October.
Goldman Sachs & Co, Morgan Stanley and Deutsche Bank Securities are the lead underwriters to the offering, the company said in a filing with the U.S. Securities and Exchange Commission.
Ruckus recorded a net profit of $6.1 million, on revenue of $94 million for the six months ended June 30.
There have been numerous offerings that have been withdrawn and postponed and which sends a very strong signal that investors have a discerning approach to many of these offerings.
The company competes with Meru Networks Inc (MERU.O), Aruba Networks Inc (ARUN.O) and larger companies such as Cisco Systems Inc (CSCO.O).
While Cisco reported better-than-expected results last week and pointed to a slow improvement of the U.S. market, it remained extremely cautious of Europe.
Net proceeds from the offering would be used for working capital expense and other general corporate purposes, Ruckus said.
Its customers include Time Warner Cable Inc (TWC.N), Towerstream Corp (TWER.O), Tikona Digital Networks, and Bright House Networks among others.
Shares of the company were down more than 4 percent at $14.31 in afternoon trading on the New York Stock Exchange on Friday.
(Reporting by Avik Das and Ashutosh Pandey in Bangalore; Editing by Joyjeet Das and Anil D’Silva)
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