What's going on?

Shares of American cybersecurity company Cloudflare hit the stock market on Friday � and investors immediately sent their value�flaring up 20%.

What does this mean?

The lead-up to Cloudflare�s stock market debut was overshadowed slightly by controversy surrounding its former work for notorious online forum 8chan � and, potentially, a host of criminal organizations. Nevertheless, the denial-of-service attack specialist raised more than initially planned from its initial public offering (IPO): $525 million from the sale of 35 million shares.


An investor scramble for the newly minted shares then led to their price rising even further ��valuing Cloudflare at a sunny $5 billion. That contrasted with the first-day performance of direct-to-consumer dentist SmileDirectClub: its shiny new stock dropped 30% on Thursday, making it the third-worst big IPO birthday since 1990.

Why should I care?

For markets: IPOver it?

Like many of this year�s stock market newbies, Cloudflare�s latest set of earnings showed both sales and losses rising. That�s OK for some: shares of fellow loss-making cyber guru Crowdstrike have nearly doubled in value since its June IPO. But Uber, now selling another $750 million of bonds to pay for its takeover of Middle Eastern rival Careem, hasn�t fared so well. When a company goes public, investors start looking past flashy growth figures and asking awkward questions about stuff like �financial sustainability� and �corporate governance�. SmileDirectClub�s disappointing debut may have been partly down to investor concerns about the latter � and WeWork is desperately seeking to address similar worries in order to save its own upcoming IPO (tweet this). 2019�s IPO boom may end up exposing a few hollow crowns…

The bigger picture: Cybersecurity is on fire(wall) right now.

With more critical global infrastructure headed online � including, in China, currency � it�s perhaps no surprise that cybersecurity providers are hot property among investors. That includes private equity giants, which may have gatecrashed chipmaker Broadcom�s recent bid to buy security software firm Symantec�s non-consumer business with an offer for the whole company.