* Company valued at $126 million
* Shares fall as much as 8 pct
By Avik Das
Nov 16 WiFi products maker Ruckus Wireless Inc
failed to impress in its market debut after higher
pricing of its offering tempered investor enthusiasm in a weak
U.S. IPO market.
Shares of the company fell as much as 8 percent in its debut
on Friday, a day after it priced its initial public offering of
8.4 million shares at $15 per share, the top end of its range.
At that price, the company is valued at $126 million.
Ruckus Wireless Chief Executive Selina Lo shrugged off the
share movement saying one day was not an indication of overall
"The market wasn't very strong today," she said adding that
while some companies had decided to pull their IPO's planned for
this week, Ruckus had seen "tremendous interest" from investors
and therefore decided to go ahead.
Lo said she was confident about growth for the company
especially after much larger competitor Cisco Systems Inc
earlier in the week said service-provider Wi-Fi grew
almost 100 percent year-over-year.
Ruckus Wireless makes WiFi technology for corporate and
service providers, helping them offload traffic from their
Tech IPOs have shown widely different results this year.
Social network Facebook has seen its value drop almost 50
percent since its IPO in May while network security company Palo
Alto Networks and social software company Workday both showed
strong market debuts.
"It's (Ruckus) an example of a company priced aggressively,
rather than priced conservatively," said Jay Ritter, an IPO
expert and professor of finance at University of Florida.
Investors remain cautious about the U.S. IPO market, which
has seen a string of truncated issues, withdrawals, delayed
offerings and weak debuts this year, and the market is not
expected to improve anytime soon.
"The IPO market improvement would come from a fiscal deal
worked out with the Congress," David Menlow, president of
IPOfinancial.com, told Reuters.
Sunnyvale, California-based Ruckus, backed by venture
capital firm Sequoia Capital, filed for a $100 million IPO in
Goldman Sachs & Co, Morgan Stanley and Deutsche Bank
Securities are the lead underwriters to the offering, the
company said in a filing with the U.S. Securities and Exchange
Ruckus recorded a net profit of $6.1 million, on revenue of
$94 million for the six months ended June 30.
There have been numerous offerings that have been withdrawn
and postponed and which send a very strong signal that investors
have a discerning approach to many of these offerings.
The company competes with Meru Networks Inc, Aruba
Networks Inc and larger companies such as Cisco and
While Cisco reported better-than-expected results last week
and pointed to a slow improvement of the U.S. market, it
remained extremely cautious of Europe.
Net proceeds from the offering would be used for working
capital expense and other general corporate purposes, Ruckus
Its customers include Time Warner Cable Inc,
Towerstream Corp, Tikona Digital Networks, and Bright
House Networks among others.
Shares of the company were down more almost 6 percent at
$14.11 in afternoon trading on the New York Stock Exchange on