Canada’s Latest Tech Public Debut Swings Amid Soft IPOs
(Bloomberg) -- The chief executive officer of Canada’s latest tech IPO is unfazed by the stock’s big price swings in the past week, saying he expects volatility to continue until the enterprise software provider reports quarterly earnings results next year.
Coveo Solutions Inc.’s newly-listed shares have fallen below its initial issue price of C$15 twice in its first week of trading, after climbing as high as C$18 on its debut. It closed at $17.41 on Thursday. The stock had its debut on Nov. 18.
“Right now we’re pretty happy with where it is,” CEO Louis Tetu said in an interview, referring to the company’s stock. “The first jury is on our next earnings call. That’s really going to be when the market prices the security according to where the market is.”
Coveo closed a C$215 million initial public offering, clinching its spot as one of the year’s largest tech listings, according to Bloomberg data. Since then, shares of tech firms globally have slumped as investors fled growth stocks amid rising bond yields.
Amid the rush of IPOs this year, many have booked underwhelming performances. Of the 31 IPOs of at least C$100 million completed on Canadian exchanges this year, half are trading below issue price — many of which are tech stocks, according to data compiled by Bloomberg.
“Tech stocks have been hammered over the past few days and that tide could change,” Tetu said. “For us, it made sense and we knew we could sell this book.”
Coveo offers artificial intelligence-powered enterprise search and “insight” platforms for businesses including Blackberry and Salesforce. It reported a 17% jump in its revenue to C$64.9 million in the three months ended March 31 compared to the prior year, according to company filings.
Before its IPO, Coveo raised C$446 million from investors including Canada’s OMERS Growth Equity, Evergreen Coast Capital, and BDC Venture Capital, as well as California-based Evergreen Coast Capital Corp.
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