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Once-Hot IPOs Get Cooler Receptions After Earnings Reality Check

Jeran Wittenstein

(Bloomberg) -- Some of the hottest initial public offerings of the year are getting cooler receptions after earnings reports put some of the massive share gains in perspective.

As the S&P 500 Information Technology Index climbed higher on Friday, CrowdStrike Holdings Inc. and Zoom Video Communications Inc. were among recent debuts that saw triple-digit share price gains shrink after strong earnings reports. CrowdStrike sank as much as 13% despite revenue forecasts that topped the highest analyst estimates, while Zoom slipped 6.9% even though its results were widely praised.

Slack Technologies Inc., a direct listing that surged 49% from its reference price in its first day of trading, has fallen 11% in the two days since reporting second-quarter earnings. The collaboration software company’s third-quarter sales forecast disappointed even though it exceeded the average analyst estimate at the midpoint.

Read more: Fresh IPOs Stink Up Earnings Season With Missed Results

Cloud software company Medallia Inc. dropped as much as 9.5% on Friday after an earnings report that William Blair called “solid.” The stock is still up 65% since its debut on July 18.

To contact the reporter on this story: Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Drew Singer

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