First tech IPO of the year looks like a dud

Dorsey unfazed by Square's lower IPO price
Dorsey unfazed by Square's lower IPO price

SecureWorks, Dell's cybersecurity business, became the first tech company to go public in 2016. It already looks like it's a bust.

Dell was hoping to fetch between $15.50 and $17.50 for each of the 9 million shares it was offering. Instead, it priced its shares at $14 and only put 8 million of them up for sale.

That means Dell raised only about $112 million during SecureWorks' initial public offering on Thursday, about 25% less than the $150 million it had initially hoped for.

The company is in the red-hot cybersecurity sector, but it is unprofitable. SecureWorks told potential investors that it did not see a path to profitability in the near future. It lost more than $72 million last year.

SecureWorks is the first tech company to go public in four months -- the longest fallow stretch since the Great Recession ended in 2009. Concerns about a tech bubble and a volatile stock market have scared companies away from IPOs.

But a strong showing when SecureWorks starts trading on the Nasdaq stock exchange Friday could help improve the appetite for tech IPOs. Shares of SecureWorks (SCWX) rose 3% above their IPO price during midday trading on Friday.

Shares of SecureWorks are trading under the ticker SCWX.

CNNMoney Sponsors