AppDynamics Postpones Planned December IPO Until Next Year

Software company AppDynamics Inc. is postponing its planned December initial public offering due to uncertainty following the U.S. presidential election, according to people familiar with the matter.

The company had planned to sell shares on the Nasdaq exchange during the third week of December after having filed confidentially with the Securities and Exchange Commission earlier this year, the people said. But it recently opted to delay the listing until at least January after Donald Trump's unexpected presidential victory over Hillary Clinton earlier this month, they added.

U.S. stocks have risen sharply since Mr. Trump's election on expectations of faster growth, particularly in the manufacturing sector. But technology stocks that were seen as winners in a slow-growing economy largely have lagged behind the rally.

AppDynamics's software helps companies monitor the performance of their networked applications. The IPO is expected to value the company between $2 billion and $3 billion, according to people familiar with the deal.

AppDynamics's move takes yet another listing off the 2016 calendar. Even as stocks touch all-time highs, IPO volume is on track to reach lows not seen since the financial crisis.

So far this year, 104 companies have raised $22 billion in U.S. IPOs, according to data provider Dealogic, down from 171 deals that had raised $35.5 billion by the same time last year. Technology company IPOs have been particularly scarce, with just 23 tech firms raising $3.8 billion in U.S. debuts this year.

Many highly valued tech startups have opted to postpone offerings beyond 2016, while others, such as cybersecurity company Blue Coat Systems Inc. and Canadian auto marketplace Trader Corp., sold themselves just before planned IPOs.

Tech companies that made their debuts in 2016 largely have outperformed the market, rising an average of 29.5% on their first day of trading, according to Dealogic. But underwriters said the weak performance of Shanghai-based logistics company ZTO Express Inc., the largest IPO of the year, has spooked some investors and executives of companies waiting to go public.

ZTO, which delivers parcels for businesses including Chinese e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc., raised $1.4 billion in a late-October offering. After pricing above its initial range at $19.50, it closed lower on its first day of trading and remains down more than 20% from its IPO price.

Still, some expect the strong performance of recent tech IPOs to spur more public listings next year. Messaging platform Snap Inc. recently filed confidentially for an IPO ahead of a planned 2017 public listing, The Wall Street Journal reported. The deal is expected to value the company, formerly known as Snapchat, at as much as $25 billion.

AppDynamics was expected to debut around the same time as Trivago, a German travel-booking site that is majority-owned by Expedia Inc. Trivago has said it plans to raise up to $400 million in its offering, but a person familiar with the deal said the company is likely to increase the offering.

AppDynamics tapped Goldman Sachs Group Inc., Morgan Stanley and J.P. Morgan Chase & Co. to serve as lead underwriters, according to people familiar with the matter. The company was valued at $1.9 billion in a November 2015 private fundraising, up from $1.1 billion in July 2014.

Write to Maureen Farrell at [e-mail]

(END) Dow Jones Newswires

November 22, 2016 15:05 ET (20:05 GMT)

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