- The CEO of Canada’s most recent tech IPO is unfazed by the stock’s current price swings, saying he expects volatility to continue until the enterprise software provider reports quarterly earnings results next year.
Coveo Solutions Inc.’s newly-listed shares fell below their initial issue price of C$15 twice in their first week of trading, after rising as high as C$18 on their debut. On Thursday, it closed at $17.41. The stock went public on November 18.
“Right now, we are much happy with where it is,” CEO Louis Tetu said of the company’s stock in an interview. “The first judgment will be delivered on our next earnings call.” That will be when the market prices the security based on where the market is.”
According to Bloomberg data, Coveo closed a C$215 million initial public offering, making it one of the year’s most prominent tech listings. Since then, shares of technology companies have fallen globally as investors have fled growth stocks in response to rising bond yields.
Among the flurry of IPOs this year, many have delivered disappointing results. According to Bloomberg data, half of the 31 IPOs of at least C$100 million completed on Canadian exchanges this year are trading below issue price, many of them being tech stocks.
“Tech stocks have been hammered in recent days, and that tide may change,” Tetu said. “It made sense to us, and we knew we could sell this book.” Coveo provides artificial intelligence-powered enterprise search and “insight” platforms for companies such as Blackberry and Salesforce. According to company filings, it reported a 17 percent increase in revenue to C$64.9 million in the three months ended March 31 compared to the prior year.
Before its IPO, Coveo raised C$446 million from investors, including OMERS Growth Equity, Evergreen Coast Capital, BDC Venture Capital in Canada, and Evergreen Coast Capital Capital in California.
Source: Bloomberg News
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