Shares of Twilio Inc close to doubled from the initial public offering price during the company’s first trading day, a strong sign during an IPO dry spell when it comes to techs.
The company, based in San Francisco debuted with the best performance for a first day for any IPO that is U.S. listed thus far in 2016.
Analysts as well as many fund managers attributed that success to a number of factors including potential growth of the company to the broader rally on the market Thursday to the backing of the stock offering by T. Rowe Price Group.
Others said it was too risky for Twilio to go ahead this week with its offering. An increase in the volatility of the stock market amidst concerns over the fall out of a UK vote to leave the European Union, has become a reality.
Voters voted to leave the EU and worldwide stocks have plummeted and the Dow futures are off by over 500 points prior to the opening bell.
Nevertheless, the first day of trading was highly successful for the company as it closed up more than 92% ending the day at $28.79.
Twilio snapped a period of 196 days with no IPO pricing above their ranges, the longest stretch of that kind since a close to year long stretch that ended during April of 2009, showed data taken from Dealogic.
The company put its price one dollar above the expected high end at $15 per share late on Wednesday.
Looking ahead it is not clear whether the IPO of Twilio marks the pivot point in the tech market for IPOs.
Some investors have said that Twilio, due to its backers that are high profile, including Bessemer Venture Partners and T. Rowe Price, is just an anomaly and combined with a shaky market will not spur more offerings from tech companies.
In Friday morning premarket trading, Twilio is down 4.2% but does not seem to be bothered too much, how stocks worldwide took a beating on Friday and the Dow is down by over 500 points in futures.
The close to $1 billion valuation of the company in rounds of private fundraising made it an offering that was closely watched from Wall Street across to Silicon Valley.
At its $15 per share IPO price, Twilio had a $1.2 billion market value, more than what it had been valued at in its previous round of financing.
At the end of the first day of trading, the market value of Twilio had increased to $2.4 billion.