What's going on?

Cloud computing company Nutanix completed an initial public offering (IPO) on Friday, which means its shares became freely traded on a stock exchange for the first time. Its stock price more than doubled on its first day of trading!

What does this mean?

Nutanix builds software that helps companies store data securely in �the cloud� (including the US Army, Samsung, and IKEA). It�s a so-called tech �unicorn� because its valuation in the private market exceeded $1 billion. Friday�s IPO valued Nutanix at $2.2 billion which, importantly, was above its latest private market valuation of about $2 billion. The company was initially targeting a lower valuation, in order to ensure there was interest in the deal (as fundraising via the IPO market has generally been difficult this year). But it proved pretty popular among public investors, and so was able to demand a higher price for its shares. As it turns out, those initial investors did pretty well for themselves (at least, so far).

Why should I care?

The bigger picture: This news is (arguably) good for private market investors in tech companies.
In recent years, it�s been popular and relatively easy for private tech companies to raise investment without becoming a public company. That has created a number of �unicorns,� but it�s also caused some concerns that private investors have been pushing up the value of these �startups� to unrealistic levels. By achieving a higher valuation in the public market than it did in the private market, Nutanix is effectively proving to other unicorn investors that it�s still possible to �go public� at a higher valuation.


For markets: �Tech IPOs could pick up steam going into 2017.
It�s been a quiet year for IPOs. But as tech companies like Nutanix, Twilio and Line complete IPOs at reasonable valuations and see their stocks rise significantly afterwards, it helps pave the way for more tech IPOs to come. Companies (and, especially, their existing investors) like raising money at higher valuations and investors who have recently �won� by buying into tech IPOs are more likely to invest in future ones.