Sunnyvale's Ruckus brings its IPO to Wall Street, takes in $126 million
SUNNYVALE, Nov 16, 2012 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) --
Wall Street bought the Ruckus on Friday, as the Silicon Valley enterprise wireless dealer exercised an initial public offering that raked in $126 million at a valuation of $1.2 billion. When shares reached the floor of the New York Stock Exchange, investors were less kind, however, with shares immediately falling lower than the IPO price.
Ruckus Wireless sold 8.4 million shares at $15 apiece, the top of the proposed price range, and began trading Friday morning under the ticker symbol "RKUS." After opening at the $15 IPO price, shares sold for as low as $13.75 in the morning session; at 9 a.m. Pacific time, the stock was selling for $14.43, a 3.8 percent drop.
The company sells advanced wireless equipment to mid- and large-size businesses, mostly focusing on Internet service providers. While battling with large companies that offer similar products along with their more natural offerings, such as networking giant Cisco (CSCO), Ruckus must also compete with similar companies like its Sunnyvale neighbor, Aruba Networks, which has a market cap of about $2.2 billion while trading on the Nasdaq.
Ruckus has managed to build strong financials despite the competition, boosting revenues 41 percent between 2009 and 2010, then another 26 percent in 2011, when the company
produced a profit of $4 million. So far in 2012, that rate of growth has sped up, with the first nine months out of the year showing 93 percent revenue growth with net income nearing $30 million and a customer base of 16,000 companies and counting, a majority of them overseas.
The company's cofounders remain as executives, with Bill Kish serving as chief technical officer and Victor Shtrom acting as chief wireless architect while president and CEO Selina Lo runs the business. Lo has a history of developing startups, with her last effort, Alteon WebSystems, selling to Nortel for $7.8 billion.
The 10-year-old purveyor of "Smart Wi-Fi" products sold 7 million of the IPO shares -- the rest were sold by early investors -- to add more than $100 million to its company coffers. The company has 559 workers, according to its website, which manages to show the company's sense of humor as well, announcing the company's favorite holiday is "Festivus" and favorite food is chili cheese dogs. It has received nearly $73 million in venture capital from the likes of Sequoia Capital, Sutter Hill Ventures and Motorola Ventures.
Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.
___ (c)2012 the San Jose Mercury News (San Jose, Calif.) Visit the San Jose
Mercury News (San Jose, Calif.) at www.mercurynews.com Distributed by MCT
[ Back To Cisco News 's Homepage ]