After going public late Wednesday at $20 a share, cybersecurity firm McAfee Corp. saw its shares tumble about 7% as they sold for the first time on the public market Thursday.

The $20 figure was below the maximum figure of $22 per share McAfee proposed in its S-1 U.S. Securities and Exchange Commission filing, but that still didn’t get investors to pay up. The decline came in stark contrast to some recent initial public offerings in which the first-day trading soared over the offering price.

At $20, McAfee would have a valuation of about $8.6 billion based on the outstanding shares listed in its prospectus, according to Yahoo Finance. McAfee is offering 37 million Class A shares in the float, delivering $740 million in proceeds that the company plans to use to pay off part of its nearly $4.7 billion in debt.

The company had previously been listed on public markets before it was acquired by Intel Corp. in 2010 for $7.68 billion. A majority stake McAfee was subsequently spun off from Intel in a deal with the private equity firm Thoma Bravo announced in September 2016 and completed in April 2017. Private investment firm TPG has held a majority stake in the firm since that time. TPG, Thoma Bravo and Intel control 82.2% of the voting power after the IPO.

McAfee announced plans to go public in September. The company comes into its IPO with revenue of $1.4 billion in the six months ended June 27. In a rarity for a tech company going public, McAfee is also profitable, booking $31 million in net income for the first six months of the year.

The company, which no longer has a relationship with its founder John McAfee, has its software installed on more than 600 million devices and is a well-known household name when it comes to consumer cybersecurity in western markets.

McAfee returns to public trading at a time equities markets, particularly for tech stocks, have found a willing audience despite a year in which much of the world plunged into recession due to COVID-19 pandemic-related lockdowns.

“We are firing on all cylinders,” Ashish Agarwal, former interim chief financial officer and current senior vice president of strategy and corporate development, said in an interview early Thursday with SiliconANGLE. “McAfee’s business is being driven by the secular trend of more and more of us living our lives digitally.”

The company carries significant debt of almost $4.7 billion, and it plans to use most of the IPO proceeds to pay off a small portion of that. Agarwal said that with healthy free cash flow, the debt shouldn’t be a big burden for McAfee.

But it is a factor in a market where many startups continue to form and flourish and there’s more consolidation forming larger, broad-based cybersecurity companies. “We’re fortunate that our market is large, expanding and not going to slow down secularly,” he said. “We have a brand that’s synonymous with security.”

Among recent tech floats, data analytics firm Palantir Technologies Inc. and work management software company Asana Inc. both saw their share prices rise on their debut Sept. 29, while shares in video game software maker Unity Software Inc. rose 44% on their debut Sept. 17.

In a more recent example, cybersecurity company Datto Inc. went public Tuesday evening and rose as much as 20% during today before closing up 3.9% over its opening price of $32. Notably, Datto sold its shares at $27 each, meaning that the premium over its float price is higher yet.

With reporting from Robert Hof

Image: McAfee