Sumo Logic’s Trading Debut Rise Adds to Software’s Strong Week

(Bloomberg) -- Sumo Logic Inc. climbed 22% on its first day as a public company after a $326 million initial public offering, following even stronger trading debuts this week by two other cloud-based software makers.

Snowflake Inc. gained 112% in its first day of trading while JFrog Ltd. rose 47%, the best performances so far for the 18 IPOs that have priced this week. Unity Software Inc., a developer of software used to design video games, is seeking to raise as much as $1.2 billion in its listing set to price Thursday.

Sumo Logic sold 14.8 million shares for $22 apiece on Wednesday after marketing them for $17 to $21 each. The shares closed Thursday at $26.88, giving the Redwood City, California-based company a market of $2.65 billion.

Telemedicine provider American Well Corp. climbed 28% in its trading debut Thursday, after its IPO raised $742 million.

Two other companies sunk in their debuts Thursday. Broadstone Net Lease Inc., a real estate investment trust, had priced its IPO at the bottom of its marketed range to raise $570 million. Its shares fell 4.1% Thursday.

Packaging and container maker Pactiv Evergreen Inc. had one of the worst launches this year on a U.S. exchange. After pricing its shares below its targeted range to raise $575 million, the company’s stock dropped 22% Thursday.

For More: Pactiv Evergreen Falls in U.S. IPO After Downsizing Offering

Sumo Logic is d at about seven to nine times forward sales multiples. That’s much lower than Snowflake and JFrog, which have higher net retention rates for customers and more sustainable top-line growth, Bloomberg Intelligence analyst Mandeep Singh wrote in a note.

For the six months ended July 31, Sumo Logic lost $36 million on revenue of $97 million, according to its filings. The company’s largest shareholder is the venture capital firm Greylock Partners and its affiliates, with a 19.2% stake after the offering, the filings show.

Sumo’s offering was led by Morgan Stanley, JPMorgan Chase & Co., Royal Bank of Canada and Jefferies Financial Group Inc. The shares are trading on the Nasdaq Global Select Market under the symbol SUMO.

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