Pure Storage Updates SEC Filing, Indicates Pure Storage IPO Price Range

  • Pure Storage updated its S-1 SEC filing.
  • Pure Storage IPO price indicated to range from $16 to $18 per share.
  • Pure Storage Class A shares will have 1.5% of total voting power.

The latest update on the Pure Storage IPO values the company at between $2.96 billion and $3.33 billion, based on the latest S-1 filing with the SEC. Pure Storage plans to offer 25 million shares of Class A stock, priced in the range of $16 to $18 a share.

As per previously available news, as highlighted below, Pure Storage had said that it was valued at $3 billion, following a round of funding let by the T. Rowe Price Group. However, that was nearly a year and half ago. In the  best case scenario, the latest Pure Storage IPO pricing reflects only a marginal increase in valuations, assuming that the company's shares find demand at the upper end of the price band.

Up from the previously reported $300 million that Pure Storage IPO was expected to raise, the company now plans to raise as much as $450 million through its initial public offering.

In addition to the 25 million shares that Pure Storage is expected to issue, the company also has an overallotment option for an additional 3.74 million shares. If the company issues only 25 million shares in the given price range, it would translate to a range of $400 million to $450 million in funds raised. However, if Pure Storage decides to use the overallotment option, the move would take the funds raised to between $460 and $517.5 million.

According to Bloomberg, Pure Storage had 12% of the 1.3 billion Dollar market for solid-state array systems in 2014. These include those with flash technology, which rather than using spinning disks, uses chips. Other notable slices of market share were with EMC (NYSE:EMC) which held the top spot with a 34% share of the market and IBM (NYSE:IBM) which was believed to be accounting for 18% of the market. Another one of its noteworthy competitors is NetApp (NASDAQ:NTAP). Recently, Pure Storage and IBM announced an patent and cross-license agreement, though the financial terms were undisclosed.

Quoting from the post:

Pure Storage’s IPO will serve as test over whether “the private market is intrinsically different from the public market, from a valuation perspective,” said Rett Wallace, chief executive officer at Triton Research, which analyzes Silicon Valley companies preparing an IPO.

“In the Valley, an emerging clever truism is that an IPO is the new down round,” he said. “With so few tech deals in the market, Pure Storage is set up to be the singular data point to support or debunk this idea.”

Pure Storage shares will have Class A and Class B categories of shares, which much like in the case of Google, will be differentiated, at large, by voting rights. Class A shares will make the holder eligible to cast one vote per share, whereas Class B shares are entitled to 10 votes. Following the IPO, about 1.5% of the voting power will rest with class A shareholders, with the rest being held by executives and venture capital investors via the Class B category of shares. Of this, a little over 50% of the voting rights will be held by Greylock, Sutter Hill Ventures and Redpoint Ventures, three venture capital firms.

Pure Storage has as its customers, Skullcandy, Intuit, Shutterfly, LinekdIn and Nielsen, among others. Pure Storage plans to list its Class A on the New York Stock Exchange under the symbol "PSTG".

 

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Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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