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High-flying IPOs sell by quarterly results



By Noel Randewich and Arjun Panchadar

SAN FRANCISCO (Reuters) – Three of Wall Street's top-performing IPOs in 201

9 fell late on Thursday after the company's quarterly results failed to satisfy investors and justify their high valuations. [19659003] Zoom Video Communications fell by 2% in expanded trading, even after the video conferencing provider's quarterly results and full-year outlook beat analysts' expectations.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Cyber-security company Crowdstrike tumbled 8.7% after it reported better-than-expected results and provided upbeat quarterly guidance. " data-reactid = "25"> Cyber ​​security company Crowdstrike dropped 8.7% after reporting better-than-expected results and providing positive quarterly guidance.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "And business software seller Medallia tumbled 12.3% after its results also beat analysts' average expectations. " data-reactid = "26"> And business software vendor Medallia fell 12.3% after results also beat analysts' average expectations.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In a year marked by disappointing public listings by Uber Technologies and Lyft the stock performances of Zoom, Medallia and Crowdstrike have stood out since their IPOs. " data-reactid = "27"> For a year marked by disappointing public quotes by Uber Technologies and Lyft the stock performances of Zoom, Medallia and Crowdstrike have stood out since their IPOs.

Before Thursday's post-fall decline, Zoom was up 157% from its original offering in April, Crowdstrike had increased 155% since it was released in June, and Medallia was up 74% from its July listing.

Sales on Thursday, even after the money – losing companies beat consensus expectations, suggest that investors may be more concerned about high valuations.

"The strong pressure and weakness of the shares has been a recent pattern," said analyst Alex Henderson.

"Investors are leery of this market today, tomorrow and appear to be selling in strength, and unwilling to let them ride, preferring to make profits," Henderson added.

Earlier on Thursday, Crowdstrike traded about 85 times expected earnings for the next 12 months, while Medallia traded a multiple of 37, according to Refinitive data.

Zoom had a turnover of 38 times expected turnover over the next 12 months. On average, analysts do not expect Zoom to report a non-GAAP result before the quarter ending October 2020.

Both Zoom and Crowdstrike's year-over-year revenue growth was reduced from the first quarters as a public company. Zoom's sales growth slowed to 96% in the second quarter, from 103% in the first, while Crowdstrike's growth slowed to 94%, from 103%.

Uber has been down 28% since its IPO in May, which would have easily been the year's most anticipated. It is now regarded as the most disappointing, while Lyft has dropped 36% from the IPO in March.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Slack Technologies Inc's stock price more than doubled on its first day of trading in a direct listing on June 19, but has steadily fallen since then. On Friday, Slack closed just 15% above the reference price used in its listing. " data-reactid = "36"> Slack Technologies Inc's stock price more than doubled on its first trading day in a direct listing on June 19, but has fallen steadily since then. On Friday, Slack closed just 15% above the reference price used in the listing.

(Reporting by Noel Randewich in San Francisco and Arjun Panchadar in Bengaluru; Editing by Richard Chang and Shailesh Kuber)


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