Shares of security vendor Fortinet surged 33 percent Wednesday as the company made its debut on the public markets.
Fortinet bumped its initial public offering (IPO) at the last minute, offering an extra 500,000 shares at a starting price of US$12.50 per share. That was above the $9-to-$11 range the company had been expected to open at. The stock (FTNT) ended the day on the Nasdaq at $16.62.
With 12.5 million shares sold, the Sunnyvale, California, company raised more than $156 million through the offering.
Fortinet sells unified-threat-management appliances, which give customers a single view of different security threats such as spam, viruses and network intrusions.
The products may not be sexy but they are very much in demand because of information security compliance mandates, said Nick Selby, managing director of security consultancy Trident Risk Management. "They're the door hinges of the security world," he said. "Fortinet has an advantage in that they do some aggressive pricing and they're edgy and good at marketing."
After a flurry of investment in the security-conscious environment after Sept. 11, 2001, the public markets turned cool on security companies, a trend that only became more forceful with the global recession. Last year, event management vendor ArcSight's stock barely moved in its IPO. It has more than doubled since then, however.
Now with the Obama administration calling cybersecurity a priority, other vendors hope that Fortinet's success is a sign of better times ahead.