Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Flash Madness Continues: Fusion-io Prices at $19 A Share

Fusion-io, the Utah-based startup that uses flash memory to make ordinary servers run faster just priced for its debut of trading at $19 a share, or six dollars higher than the low end of the original range it gave in its revised S1 filing last month. It’s also higher higher than the $16 to $18 range the company gave in a revised S1 filing yesterday. This should push its opening valuation just shy of $1.5 billion. Read the press release here.

And the shares may open even higher yet. The bid on Fusion-io shares is $29 and the ask is north of $32 according to a couple sources of brokerage data I’ve looked at in the last few minutes. I’m certainly no expert on the mechanics of IPOs, but I think that’s a pretty good indication that the opening trades will be a lot higher than $19 a share.

As previously noted, Fusion’s biggest customers include Facebook and Apple, which both use the technology in their data centers. Others include Hewlett-Packard, IBM, Dell and Supermicro, all of which resell servers using Fusion-io’s technology.

Goldman Sachs and Morgan Stanley are acting as lead active joint book-runners for the offering while J.P. Morgan Securities and Credit Suisse are acting as passive joint book-runners. The company will trade on the New York Stock Exchange under the symbol FIO. I’ll be down at the Exchange tomorrow morning to witness the start of trading. I’ve never been to an IPO before.

At $19 a share, the holdings of CEO David Flynn holdings will be worth north of $130 million. He’s putting up 500,000 shares for sale, which at that price would be worth $9.5 million. After the offering he will control a little less than 8 percent of the equity in Fusion-io. Chief Marketing Officer Rick White owns nearly 5.7 million shares, which will at that price be worth more than $100 million.

The venture capitalists who backed it will do very well New Enterprise Associates owns nearly 26 million shares which at $19 a share would be worth nearly half a billion dollars. Lightspeed Ventures owns another 8.8 million shares, which would be worth more than $167 million.

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