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Infrastructure management software firm SolarWinds Inc. went public Friday, but unlike some recent tech initial public offerings, investor reaction on its public market debut Friday was so-so.

The company had cut the price of its shares and the number it will offer ahead of its New York Stock Exchange initial public offering Friday. SolarWinds, which had previously been listed on the NYSE until it was taken private in a $4.5 billion deal in October 2015, said in a filing Thursday that it expected to raise up to $400 million in the IPO, down from an original guidance of up to $900 million.

As it happened, the 25 million shares were offered at $15 a share, the low end of an already lowered range of $15 to $16 per share announced Thursday. That’s down from an initial 40 million shares at a range of $17 to $19 per share. The company raised $375 million, valuing it at about $4.6 billion.

On top of that, shares in initial trading Friday were trading down about 2 percent from that initial price in the first few hours of trading. However, the shares rallied a bit later in the day, rising by 3 cents above the offering price by the market close.

The reaction may signal a cooling of investor interest in IPOs, which have been coming steadily with mostly positive reaction, at least in enterprise technologies. However, there’s no sign companies themselves are shying away. On Friday, “experience management” software provider Qualtrix Inc. filed papers to go public, and cybersecurity software firm CrowdStrike Inc. was reported to have hired Goldman Sachs Group to prepare for an IPO in the first half of 2019.

The notable change in SolarWinds’ offering comes from investors, with controlling shareholders Silver Lake and Thoma Bravo now only offering 4.5 million on their own stock in the IPO versus an original figure of 22.5 million. SolarWinds itself has increased the amount shares it will offer from 5 million to 20 million.

The decision by SolarWinds to drop the number of shares offered and their price comes as a surprise given that the company’s fundamentals are fairly sound and certainly better placed than numerous unprofitable tech startups that have floated before it this year.

SolarWinds booked nearly $800 million in total revenue, before certain costs such as those incurred in going private, in the trailing 12 months ended June 30. In 2017, revenue growth was 17 percent. It’s also profitable with strong cash flow but loses money on a net basis because of its debt load.

The debt, which totals $2.3 billion, doesn’t help SolarWind’s numbers, but the cut in share price and number of shares offered is being attributed to overall market turmoil.

“Tech companies have been lining up to hold IPOs next year, but it’s turning out to be a bumpy ride for any trying to brave the market amid the current volatility,” The Financial Times noted.

Officially SolarWinds said it’s going public to offer it financial flexibility, create a public market for common stock and enable access to the public equity markets for stockholders. But according to Joe Kim, the company’s executive vice president and chief technology officer, the main aim is to enable an expansion into new markets and customer bases. “Going public allows us to spread our message and our name a little bit more,” he said in an interview Friday with SiliconANGLE.

Kim also hinted that it as a public company it can also do more acquisitions, though it has done a couple of them while private. In particular, the July acquisition of Trusted Metrics helped create a new security offering it now calls Threat Monitor, a new market for the company. “We don’t mind buying into a market for expansion,” he said, and indeed the company has made many acquisitions since it was founded in 1999.

Although the rise of cloud computing represents a challenge to SolarWinds, Kim said it’s also an opportunity as companies increasingly use multiple public cloud providers and need monitoring tools such as SolarWinds’ that work across those clouds. “Multicloud is actually good for us,” he said.

Kim professed not to worry about the stock price. “Going public is just another milestone,” he said. “We’ve gone through tough times before.”

With reporting from Robert Hof

Image: Loggy/Wikimedia Commons