Wall Street has indicated its hunger for Silicon Valley technology companies ahead of Twitter's offering, and it looks massive.
Milpitas security software company FireEye priced its IPO a whopping $3 higher per share than the range of possible prices it expected Tuesday -- when it bumped its original range $3 higher. FireEye's original prospectus sought a minimum of $168 million, but it instead reaps more than $300 million.
Redwood City advertising-technology company Rocket Fuel also priced its IPO on Thursday evening, arriving at the top of its own revised range with a $29 price, after starting the process seeking $24 to $27 for each initial share.
Slightly more than a month ago, Redwood City video-advertising company Yume had to slash its IPO price by $3 after starting with the same range as FireEye's original filing, but a rash of filings in August and Twitter's announcement in early September that it had begun the IPO process seems to have turned the market.
"These emerging software companies that are delivering into the enterprise space are bringing disruptive technologies," explained Bryan McLaughlin, a partner at PricewaterhouseCoopers who advises startups on the IPO process.
FireEye, a 9-year-old company founded by former Sun Microsystems engineer Ashar Aziz and now led by former McAfee CEO Dave DeWalt, also increased the number of shares it offered from earlier filings, announcing the sale of 15.2 million shares for $20 apiece, giving the company a valuation of more than $2 billion. Rocket Fuel, founded in 2008 to offer digital advertisers big-data software that can help them target their marketing dollars more effectively, sold 4 million shares for $29 -- the top of its revised range -- producing a total take of $116 million at a valuation of $942.5 million.
Rocket Fuel and FireEye follow South San Francisco biotechnology company Five Prime Therapeutics to Wall Street, making this the first week to feature three Bay Area debuts since the last time enterprise software companies were priming the IPO pump for a Silicon Valley social-media giant: Splunk, ProofPoint, and Infoblox went public in April 2012, a month ahead of Facebook's record-breaking IPO. Five Prime sold 4.8 million shares at $13 apiece before hitting the Nasdaq trading floor Wednesday, and has barely budged since, closing at $13.08 Wednesday and $13.11 Thursday.
Rocket Fuel and FireEye have exhibited the revenue growth IPO investors crave -- FireEye has more than doubled its annual revenue in each of the past two years, while Rocket Fuel managed to double its revenues to more than $100 million in 2012 and rake in nearly as much in the first six months of 2013 -- but neither has proved reliably profitable thus far.
"The IPO markets really yearn for growth and predictability," McLaughlin said.
Both companies will list their stocks on the Nasdaq exchange, with FireEye using the ticker symbol FEYE and Rocket Fuel the ticker FUEL, and their underwriters have access to additional shares.
For live coverage of the two companies' performance Friday in their first day on Wall Street, go to www.siliconvalley.com.
Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.