Fabled all-flash arrays, or AFA, manufacturer Pure Storage has started life as a public company on a sour note. Pure Storage shares are down more than 5% from their opening IPO price of $17. Pure Storage shares closed at $15.93 on Thursday, 8th October, after second day of decline.
Pure Storage 1-Day Share Return
Source: CNN money
To be fair, Pure Storage IPO is not the only tech IPO that has gone haywire. Many 2015 tech IPOs have fallen harder than the broader market. According to Renaissance Capital, more than 60% of this year's tech IPOs are currently trading below their IPO price. Notable IPOs that have not gone according to expectations include cloud storage company Box (NYSE:BOX) whose shares have been dropped by half since their debut on the bourses.
But what's alarming about Pure Storage's case is that most IPOs, including Box's, have usually started on a bright note and only tanked a lot later. So what's making investors shun Pure Storage's shares so early on?
Money losing streak
Let's start by cutting Pure Storage some slack. Venture Capitalists have lately been pumping massive amounts of money into startups as they look to cash out on their investments by taking their companies public. VC investing exceeded $17 billion during the second quarter of the current year for the first time since 2000. Although IPOs in 2015 have not matched the record-breaking levels achieved in 2014, they are nonetheless not far behind. So there likely is an element of market weariness as far as IPOs go.