SolarWinds is down on its first day of trading - its CEO explains why he's not sweating it

SolarWinds

SolarWinds CEO Kevin Thompson isn't sweating the low IPO price.

• SolarWinds went public on Friday at the low end of its price range and fell in its first day of trading.
• But Kevin Thompson, CEO of SolarWinds, isn't worried. In fact, he doesn't think any other software company could have made an IPO happen in the current climate.
• In a conversation with Business Insider, Thompson shared why SolarWinds made the last minute decision to lower its price, and how his team chose to celebrate its second IPO in less than a decade.

It's a bold move to take a public company during a market downturn. So it's no surprise that the last couple of days have not been easy for SolarWinds, which went public on Friday below its initial target price range and fell even lower in its first days of trading.

But CEO Kevin Thompson, who was with the company through its first IPO in 2009 and its take-private in 2016, isn't sweating it. In fact, he told Business Insider, he's proud that SolarWinds pulled it off.

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"I think we're probably the only software company who possibly could have pulled an IPO off in the last two weeks because we're not a model that's yet to be proven, we're a model that's proven with over $800 million in revenue, over $365 million in EBITDA and growing," Thompson told Business Insider on Friday.

"So I think we feel good about the fact that we could persevere in a market that others would have faded and gone away in," he said.

SolarWinds, which sells software for managing and monitoring networks, initially filed to sell 42 million shares at a price between $17 and $19. But on Thursday, the company amended its offering. It ended up selling 25 million shares at $15, and raised a total of $375 million.

"I think what we decided is that we wanted to have a really strong and concentrated shareholder base and large institutions who would be supportive of creating long term value," Thompson said. "It wasn't about creating a tremendous amount of value today. None of the management team sold; shareholders didn't sell today. We simply raised enough funds to pay off part of the debt we took on during the take private."

SolarWinds

"We set the New York Stock Exchange on fire this morning," Thompson said of the fireworks SolarWinds set off on Wall Street.

Besides paying off debt, Thompson said, the next step for the company is to expand its nascent security offerings, which the company will fund with cash.

And in any case, it hasn't stopped SolarWinds from celebrating. The Austin, Texas-based company flew in 140 employees from around the world to New York City for the IPO.

Then at 7:30 am, while daylight was just about to break in Manhattan, they set off fireworks on Wall Street - a first for the New York Stock Exchange, Thompson said.

"We set the New York Stock Exchange on fire this morning," Thompson said of the fireworks. "In all of our offices around the world today, we're having celebrations. If you happen to be running around Time Square in New York this week, you'll see a lot of pictures of celebrations on all of the billboards in Time Square."

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