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April 22, 2016updated 05 Sep 2016 10:48am

Dell’s cybersecurity firm SecureWorks prices IPO below estimates

News: SecureWorks decreased the share price and the number of shares from what was marketed.

By CBR Staff Writer

SecureWorks, a subsidiary of Dell, has sold 8m shares at a price of $14 per share. This has made investors doubt the prospects of the company, as the initial pricing was between of $15.50 to $17.50 for 9m shares.

SecureWorks has also offered a 30-day option to purchase up to an additional 1,200,000 shares of Class A common stock for underwriters. These underwriters include Bank of America Corp, Morgan Stanley, Goldman Sachs and JPMorgan Chase.

SecureWorks originally marketed to sell nine million shares within a price range of $15.5 to $17.5 each. The shares will be traded, starting Friday, 22 April 2016, at Nasdaq Stock Market under the symbol SCWX.

SecureWorks has only been able to raise $112m in its IPO, a number far below that of other technology companies that went public last year.

Experts indicate that uncertain market conditions coupled with scepticism from investors has led to slowest first quarter for US listed companies since 2009.

SecureWorks, in its prospectus, had already put losses for the 2016 fiscal year at $72.4m, compared to $38.5m in 2015. This statement might have had an influence on investors’ confidence in the company.

This year, until now, cybersecurity stocks have not performed well and have been falling since the second half of last year.

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SecureWorks is planning to invest the money for its own growth initiatives and to not support Dell for its own business.

SecureWorks provides intelligence-driven information security solutions to protect organisations from cyber attacks.

Founded in 1999, it helps companies to strengthen their cyber defences, prevent security breaches, detect malicious activity in real time.

SecureWorks was bought by Dell in 2011 which is waiting for approval for its deal to acquire EMC.

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