Final Tech IPO of 2019 May Get Boost From Wall Street Research

(Bloomberg) -- The most recent U.S. technology firm to go public is trading below its IPO price before a potential boost from Wall Street analysts this week.

Chicago-based Sprout Social Inc., which provides online social media management tools to businesses, is poised to receive initiations from sell-side analysts starting Tuesday. Goldman Sachs, Morgan Stanley, KeyBanc, William Blair, Canaccord and Stifel may publish their initial research when a 25-day quiet period expires for analysts at banks that took the company public.

Banks that served as IPO underwriters tend to be the most bullish in a new stock. With shares testing the $17 offering price, strong defenses of the company could push trading back above that level. But research that’s more bearish than expected could further pressure the stock.

Among other topics, analysts could evaluate the odds of Sprout making a meaningful acquisition in the near future. The $150 million of proceeds raised in the IPO could be used to acquire complementary products or businesses, the company said in a filing.

Read more: Sprout to Debut as Private Peers ‘Circle the Block’: ECM Watch

To contact the reporter on this story: Drew Singer in New York at dsinger28@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Steven Fromm, Will Daley

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