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Palo Alto, Kayak shares jump in market debuts
(Reuters) - Palo Alto Networks (PANW.N) and Kayak Software Corp KYAK.O both saw their share prices jump by more than 25 percent in their market debuts on Friday, as investor interest for tech companies rebounded following Facebook Inc's (FB.O) botched public offering.
Shares of Palo Alto, a maker of security software, finished up 26.5 percent at $53.13, after pricing at $42. Online travel company Kayak closed up 27.6 percent at $33.18, after going public at $26 a share.
"Clearly there was damage done by Facebook but a high-quality company with brand awareness can still get an extremely attractive premium," said Scott Sweet, senior managing partner with IPO Boutique.
The IPOs of Palo Alto and Kayak come on the heels of a successful offering from IT management services provider ServiceNow Inc (NOW.N) last month. ServiceNow's flotation helped open an IPO market that was effectively frozen for a month following Facebook IPO.
Palo Alto's 6.2 million shares were priced late Thursday, raising $260.4 million. Earlier this week, Palo Alto, which sells firewalls to companies that block out malware and viruses, had raised its price range to $38 to $40 from a range of $34 to $37.
In fiscal 2011, Palo Alto's revenue more than doubled to $118.6 million. The company reported a net loss of $12.5 million, down from $21.1 million a year earlier.
Palo Alto offered 4.7 million shares in the IPO, while existing shareholders offered 1.5 million. The company's backers include Greylock Partners, Sequoia Capital and Globespan Capital Partners.
Kayak, which filed to go public in November 2010, had originally been slated to launch its offering following Facebook's IPO in May. But those plans were pushed back after the social networking giant's shares fell, losing around a third of their value.
In fiscal 2011, Kayak's revenue rose 32 percent to $224.5 million and net income grew 21 percent to $9.7 million.
Kayak, which operates a website and a mobile site to help consumers compare prices for airlines and hotels, faces competition from Google Inc (GOOG.O), Orbitz Worldwide Inc (OWW.N), Expedia Inc (EXPE.O), Travelocity and Microsoft Corp (MSFT.O).
Kayak's venture backers include Sequoia Capital, Accel Partners, General Catalyst Partners and Oak Investment Partners.
The offerings from Palo Alto and Kayak were led by Morgan Stanley, whose reputation as the go-to Silicon Valley bank was scrutinized following fallout from Facebook. Palo Alto's chief executive, Mark McLaughlin, said that attention did not affect his company's IPO process.
"There's a lot of noise out there about our lead banker, but they did a fantastic job and were completely focused on Palo Alto every day," he said. "All we heard about was our IPO and not anybody else's."
(Editing by Leslie Adler)
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