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Palantir, Asana start trading above NYSE reference prices in market debut

Two software companies with ties to Facebook Inc. went public Sept. 30 via direct listings: big data and surveillance firm Palantir Technologies Inc. and task management software startup Asana Inc.

Both launched public trading above the NYSE's suggested price in direct listings, allowing their existing stockholders to sell shares directly rather than relying on bank underwriters to set pricing and ensure demand.

Asana's stock was the first of the two to start trading, with shares opening at a price of $27, above the NYSE's reference price of $21 per share. Within about 15 minutes of its first trade, Asana's stock surged by 40%.

In an SEC filing, the company disclosed that it had about 154.6 million total shares outstanding as of Sept. 28, which places its valuation as of its Sept. 30 opening price at about $4.2 billion.

Asana on Sept. 22 reported revenue for its fiscal 2021 second quarter ended July 31 of $52 million, up 57% year over year, with a non-GAAP loss of $13.7 million, or 34 cents per share. The company forecast revenue of $53.5 million to $54.5 million and a non-GAAP loss of 36 to 38 cents per share for its fiscal third quarter. For its fiscal year 2021, Asana projected revenue of $210 million to $213 million, implying growth of 47% to 49%, and a non-GAAP loss of $1.30 to $1.33 per share.

Asana's CEO and co-founder is Dustin Moskovitz, who earlier co-founded Facebook with his former Harvard roommate Mark Zuckerberg. Moskovitz left the social networking company in 2008 to start Asana with Justin Rosenstein, who is now an Asana adviser and board member.

Palantir's stock started trading at $10 a share, also more than the NYSE's reference price of $7.25 per share. The initial price gives the company a market cap of $16.5 billion, based on 1.65 billion shares outstanding, which excludes restricted stock units, options and unvested stock.

Palantir's stock jumped up to 40% above the opening price shortly after trading commenced, hitting an intraday high of $11.42.

The company in August said it registered a net loss of $164.7 million in the six months ended June 30, compared to a net loss of $280.5 million in the prior-year period. Revenue for the first half of 2020 rose to $481.2 million from $322.7 million in the prior-year period. Palantir also said its platforms were used by 125 customers in the first half of this year, which included companies in various sectors alongside government agencies worldwide.

Palantir was co-founded in 2003 by venture capitalist and former PayPal Inc. CEO Peter Thiel, who is also on Facebook's board. It develops data analysis software that is used by government agencies and large companies.

The most recent major tech direct listing was from Slack Technologies Inc., which had an exchange reference price of $26, but opened for trading June 20 at $38.50. The audio streaming platform Spotify AB similarly opted for a direct listing. Its stock opened trading April 3 at $165.90, above the NYSE reference price of $132.

So far this year, the biggest initial public offering in the information technology sector was from cloud data platform Snowflake Inc. Snowflake priced its offering Sept. 15 at $120 per share and raised $3.86 billion, including the underwriters' overallotment option. Snowflake's shares started trading Sept. 16 and had jumped 108.7% from the IPO price as of Sept. 28.

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Snowflake's IPO was twice as big as video game development platform Unity Software Inc.'s Sept. 18 offering, which was priced at $52 per share and raised $1.50 billion, including the overallotment. Unity's stock also maintained steady growth after its NYSE debut and was up 84.2% from its IPO price as of Sept. 28.

Cloud computing firm Rackspace Technology Inc., which raised $700 million from its August IPO, was the only company among the top five tech IPOs this year to see its share value fall after its market debut. Rackspace's offering was priced at $21 per share but fell more than 20% to $16.17 on its first day of trading. The stock remained down 12.1% from its IPO price as of Sept. 28.