Datadog (DDOG) shares popped 49% when trading began Thursday, with an initial public offering that raised $648 million and gave the technology company a market valuation near $7.8 billion.


The Datadog IPO priced 24 million shares at $27. That’s $1 above the high end of its price range of $24 to $26. Datadog initially set a range of $19 to $22. The stock opened at 40.35, up 49%. It closed at 37.55, up 39.1% on the stock market today.

Datadog provides a software-as-a-service platform that companies use to analyze and monitor their technology infrastructure, including cloud computing.

Research and advisory firm IPO Boutique said the offering was “many multiple times oversubscribed.” That means the request for shares among institutional investors is much higher than the amount of shares being offered.

According to a report from Bloomberg, Cisco Systems (CSCO) approached Datadog in recent weeks with an acquisition offer, which was rebuffed. Cisco reportedly offered more than $7 billion.

Datadog Revenue Up 80%

For the six months ended June 30, Datadog reported revenue of $153.3 million, up 80% from the year-ago period. It had a net loss of $13.4 million vs. a profit of $498,000 the prior year.

As of June 30, New York-based Datadog said it had about 8,846 customers, up from 7,700 at the end of last year.

“Our platform provides comprehensive visibility and insights into IT infrastructure, application performance and the real time events impacting this performance,” the company said in the Datadog IPO filing. “Our proprietary platform combines the power of metrics, traces and logs to provide a unified view of infrastructure and application performance and the real-time events impacting this performance.”

The lead underwriters are Morgan Stanley, Goldman Sachs and JPMorgan.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.


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